Bill Text: IA SF631 | 2019-2020 | 88th General Assembly | Introduced
Bill Title: A bill for an act relating to the administration of the tax and related laws by the department of revenue, including the administration and modification of certain tax credits and refunds, the individual and corporate income taxes, franchise taxes, franchise alternative minimum taxes, moneys and credits taxes, sales and use taxes, and automobile rental excise taxes, the assessment of property owned by certain long distance telephone companies, establishing a taxation and exemption of computers task force, and providing for other properly related matters, making penalties applicable, and including effective date and retroactive applicability provisions. (Formerly SSB 1249.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2019-04-27 - Withdrawn. S.J. 1174. [SF631 Detail]
Download: Iowa-2019-SF631-Introduced.html
Senate
File
631
-
Introduced
SENATE
FILE
631
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
1249)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
tax
and
1
related
laws
by
the
department
of
revenue,
including
the
2
administration
and
modification
of
certain
tax
credits
3
and
refunds,
the
individual
and
corporate
income
taxes,
4
franchise
taxes,
franchise
alternative
minimum
taxes,
moneys
5
and
credits
taxes,
sales
and
use
taxes,
and
automobile
6
rental
excise
taxes,
the
assessment
of
property
owned
by
7
certain
long
distance
telephone
companies,
establishing
8
a
taxation
and
exemption
of
computers
task
force,
and
9
providing
for
other
properly
related
matters,
making
10
penalties
applicable,
and
including
effective
date
and
11
retroactive
applicability
provisions.
12
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
13
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DIVISION
I
1
INCOME
AND
FRANCHISE
TAX
2
Section
1.
Section
422.4,
subsection
16,
paragraph
e,
3
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
4
follows:
5
Add
back
the
following
percentage
of
the
qualified
business
6
income
deduction
deductions
under
section
199A
sections
199A(a)
7
and
199A(g)
of
the
Internal
Revenue
Code
taken
and
allowable
in
8
calculating
federal
taxable
income
for
the
applicable
tax
year:
9
Sec.
2.
Section
422.9,
subsection
2A,
paragraph
a,
10
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
11
follows:
12
The
following
percentage
of
the
qualified
business
income
13
deduction
deductions
under
section
199A
sections
199A(a)
and
14
199A(g)
of
the
Internal
Revenue
Code
taken
and
allowable
in
15
calculating
federal
taxable
income
for
the
applicable
tax
year:
16
Sec.
3.
Section
422.9,
subsection
2A,
paragraph
b,
Code
17
2019,
is
amended
to
read
as
follows:
18
b.
Notwithstanding
paragraph
“a”
,
and
section
422.4,
19
subsection
16
,
paragraph
“e”
,
for
an
entity
electing
or
20
required
to
file
a
composite
return
under
section
422.13,
21
subsection
5
,
the
deduction
allowed
under
this
subsection
for
22
purposes
of
the
composite
return
shall
be
an
amount
equal
to
23
the
applicable
percentage
described
in
paragraph
“a”
of
the
24
deduction
deductions
that
would
be
allowable
for
federal
income
25
tax
purposes
under
section
199A
sections
199A(a)
and
199A(g)
of
26
the
Internal
Revenue
Code
by
an
individual
taxpayer
reporting
27
the
same
items
of
income
and
loss
that
are
included
in
the
28
composite
return.
29
Sec.
4.
Section
422.11S,
subsection
7,
paragraph
b,
Code
30
2019,
is
amended
to
read
as
follows:
31
b.
The
department
shall
authorize
a
school
tuition
32
organization
to
issue
tax
credit
certificates
for
contributions
33
made
to
the
school
tuition
organization.
The
aggregate
amount
34
of
tax
credit
certificates
that
the
department
shall
authorize
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for
a
school
tuition
organization
for
a
tax
calendar
year
shall
1
be
determined
for
that
organization
pursuant
to
subsection
8
.
2
However,
a
school
tuition
organization
shall
not
be
authorized
3
to
issue
tax
credit
certificates
unless
the
organization
is
4
controlled
by
a
board
of
directors
consisting
of
at
least
5
seven
members.
The
names
and
addresses
of
the
members
shall
6
be
provided
to
the
department
and
shall
be
made
available
7
by
the
department
to
the
public,
notwithstanding
any
state
8
confidentiality
restrictions.
9
Sec.
5.
Section
422.11S,
subsection
8,
paragraph
a,
10
subparagraph
(2),
Code
2019,
is
amended
to
read
as
follows:
11
(2)
“Total
approved
tax
credits”
means
for
the
tax
year
12
beginning
in
the
2006
calendar
year,
two
million
five
hundred
13
thousand
dollars,
for
the
tax
year
beginning
in
the
2007
14
calendar
year,
five
million
dollars,
for
tax
calendar
years
15
beginning
on
or
after
January
1,
2008,
but
before
January
1,
16
2012,
seven
million
five
hundred
thousand
dollars,
for
tax
17
calendar
years
beginning
on
or
after
January
1,
2012,
but
18
before
January
1,
2014,
eight
million
seven
hundred
fifty
19
thousand
dollars,
and
for
tax
calendar
years
beginning
on
or
20
after
January
1,
2014,
but
before
January
1,
2019,
twelve
21
million
dollars,
and
for
tax
calendar
years
beginning
on
or
22
after
January
1,
2019,
thirteen
million
dollars.
23
Sec.
6.
Section
422.11S,
subsection
8,
paragraph
b,
24
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
25
follows:
26
Each
year
by
December
1,
the
department
shall
authorize
27
school
tuition
organizations
to
issue
tax
credit
certificates
28
for
the
following
tax
calendar
year.
However,
for
the
tax
year
29
beginning
in
the
2006
calendar
year
only,
the
department,
by
30
September
1,
2006,
shall
authorize
school
tuition
organizations
31
to
issue
tax
credit
certificates
for
the
2006
calendar
tax
32
year.
For
the
tax
year
beginning
in
the
2006
calendar
year
33
only,
each
school
served
by
a
school
tuition
organization
shall
34
submit
a
participation
form
to
the
department
by
August
1,
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2006,
providing
the
certified
enrollment
as
of
the
third
Friday
1
of
September
2005,
along
with
the
school
tuition
organization
2
that
represents
the
school.
Tax
credit
certificates
available
3
for
issue
by
each
school
tuition
organization
shall
be
4
determined
in
the
following
manner:
5
Sec.
7.
Section
422.11S,
subsection
9,
unnumbered
paragraph
6
1,
Code
2019,
is
amended
to
read
as
follows:
7
A
school
tuition
organization
that
receives
a
voluntary
cash
8
or
noncash
contribution
pursuant
to
this
section
shall
report
9
to
the
department,
on
a
form
prescribed
by
the
department,
10
by
January
12
of
each
tax
calendar
year
all
of
the
following
11
information:
12
Sec.
8.
Section
422.11S,
subsection
9,
paragraphs
b
and
c,
13
Code
2019,
are
amended
to
read
as
follows:
14
b.
The
total
number
and
dollar
value
of
contributions
15
received
and
the
total
number
and
dollar
value
of
the
tax
16
credits
approved
during
the
previous
tax
calendar
year.
17
c.
A
list
of
the
individual
donors
for
the
previous
tax
18
calendar
year
that
includes
the
dollar
value
of
each
donation
19
and
the
dollar
value
of
each
approved
tax
credit.
20
Sec.
9.
Section
422.12C,
subsection
4,
Code
2019,
is
amended
21
to
read
as
follows:
22
4.
Married
taxpayers
who
have
filed
joint
federal
returns
23
electing
to
file
separate
returns
or
to
file
separately
on
a
24
combined
return
form
must
determine
the
child
and
dependent
25
care
credit
under
subsection
1
or
the
early
childhood
26
development
tax
credit
under
subsection
2
based
upon
their
27
combined
net
income
and
allocate
the
total
credit
amount
to
28
each
spouse
in
the
proportion
that
each
spouse’s
respective
net
29
income
bears
to
the
total
combined
net
income.
Nonresidents
or
30
part-year
residents
of
Iowa
must
determine
their
Iowa
child
and
31
dependent
care
credit
under
subsection
1
or
the
early
childhood
32
development
tax
credit
under
subsection
2
in
the
ratio
of
33
their
Iowa
source
net
income
to
their
all
source
net
income.
34
Nonresidents
or
part-year
residents
who
are
married
and
elect
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to
file
separate
returns
or
to
file
separately
on
a
combined
1
return
form
must
allocate
the
Iowa
child
and
dependent
care
2
credit
under
subsection
1
or
the
early
childhood
development
3
tax
credit
under
subsection
2
between
the
spouses
in
the
ratio
4
of
each
spouse’s
Iowa
source
net
income
to
the
combined
Iowa
5
source
net
income
of
the
taxpayers.
6
Sec.
10.
Section
422.60,
subsection
2,
paragraph
b,
Code
7
2019,
is
amended
by
adding
the
following
new
subparagraph:
8
NEW
SUBPARAGRAPH
.
(6)
For
purposes
of
this
paragraph,
9
“Internal
Revenue
Code”
means
the
Internal
Revenue
Code
of
10
1954,
prior
to
the
date
of
its
redesignation
as
the
Internal
11
Revenue
Code
of
1986
by
the
Tax
Reform
Act
of
1986,
or
means
12
the
Internal
Revenue
Code
of
1986
as
amended
and
in
effect
on
13
December
21,
2017.
This
definition
shall
not
be
construed
to
14
include
any
amendment
to
the
Internal
Revenue
Code
enacted
15
after
the
date
specified
in
the
preceding
sentence,
including
16
any
amendment
with
retroactive
applicability
or
effectiveness.
17
Sec.
11.
LIKE-KIND
EXCHANGES
OF
PERSONAL
PROPERTY
18
UNDER
CORPORATE
INCOME
TAX
AND
FRANCHISE
TAX
FOR
TAX
YEAR
19
2019.
Notwithstanding
any
other
provision
of
law
to
the
20
contrary,
all
of
the
following
shall
apply
when
computing
net
21
income
for
purposes
of
the
corporation
income
tax
or
franchise
22
tax
under
section
422.35
for
tax
years
beginning
during
the
23
2019
calendar
year:
24
1.
The
rules
for
nonrecognition
of
gain
or
loss
from
25
exchanges
of
real
property
held
for
productive
use
or
26
investment
and
not
held
primarily
for
sale,
as
provided
in
27
section
1031
of
the
Internal
Revenue
Code,
as
amended
up
to
and
28
including
March
24,
2018,
apply
for
state
income
tax
purposes
29
with
regard
to
exchanges
of
real
property.
30
2.
The
rules
for
nonrecognition
of
gain
or
loss
from
31
exchanges
of
property
other
than
real
property
held
for
32
productive
use
or
investment
as
provided
in
section
1031
of
the
33
Internal
Revenue
Code,
as
amended
up
to
and
including
December
34
21,
2017,
apply
for
state
income
tax
purposes,
notwithstanding
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any
other
provision
of
law
to
the
contrary.
If
the
taxpayer’s
1
federal
taxable
income
includes
gain
or
loss
from
property,
2
other
than
real
property
described
in
subsection
1,
and
the
3
taxpayer
elects
to
have
this
subsection
apply,
the
following
4
adjustments
shall
be
made:
5
a.
(1)
Subtract
the
total
amount
of
gain
related
to
the
6
sale
or
exchange
of
the
property
as
properly
reported
for
7
federal
tax
purposes
under
the
Internal
Revenue
Code.
8
(2)
Add
back
any
gain
related
to
the
sale
or
exchange
of
the
9
property
to
the
extent
such
gain
does
not
qualify
for
deferral
10
under
section
1031
of
the
Internal
Revenue
Code,
as
amended
11
up
to
and
including
December
21,
2017,
which
gain
shall
be
12
calculated
using
the
taxpayer’s
adjusted
basis
in
the
property
13
for
state
tax
purposes.
14
b.
(1)
Add
the
total
amount
of
loss
related
to
the
sale
or
15
exchange
of
the
property
as
properly
reported
for
federal
tax
16
purposes
under
the
Internal
Revenue
Code.
17
(2)
Subtract
any
loss
related
to
the
sale
or
exchange
of
the
18
property
to
the
extent
such
loss
does
not
qualify
for
deferral
19
under
section
1031
of
the
Internal
Revenue
Code,
as
amended
20
up
to
and
including
December
21,
2017,
which
loss
shall
be
21
calculated
using
the
taxpayer’s
adjusted
basis
in
the
property
22
for
state
tax
purposes.
23
c.
Any
other
adjustments
to
gains,
losses,
deductions,
or
24
tax
basis
for
the
property
given
up
or
received
in
the
sale
or
25
exchange
pursuant
to
rules
adopted
by
the
director.
26
Sec.
12.
REFUNDS
——
EARLY
CHILDHOOD
DEVELOPMENT
TAX
27
CREDIT.
Notwithstanding
any
provision
of
law
to
the
contrary,
28
for
tax
years
beginning
prior
to
January
1,
2019,
refunds
of
29
the
early
childhood
development
tax
credit
provided
in
section
30
422.12C,
subsection
2,
requested
on
or
after
the
effective
31
date
of
the
provision
of
this
division
of
this
Act
amending
32
section
422.12C,
subsection
4,
shall
not
exceed
the
amount
33
allowed
under
section
422.12C,
subsection
4,
as
amended
by
this
34
division
of
this
Act.
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Sec.
13.
LEGISLATIVE
INTENT.
It
is
the
intent
of
the
1
general
assembly
that
the
provisions
of
this
division
of
2
this
Act
amending
section
422.11S
are
conforming
amendments
3
consistent
with
current
state
law,
and
that
the
amendments
do
4
not
change
the
application
of
current
law
but
instead
reflect
5
current
law
both
before
and
after
the
enactment
of
this
Act.
6
Sec.
14.
EFFECTIVE
DATE.
The
following,
being
deemed
of
7
immediate
importance,
take
effect
upon
enactment:
8
1.
The
section
of
this
division
of
this
Act
amending
section
9
422.12C,
subsection
4.
10
2.
The
section
of
this
division
of
this
Act
relating
to
11
refunds
for
the
early
childhood
development
tax
credit.
12
3.
The
section
of
this
division
of
this
Act
relating
to
13
like-kind
exchanges
of
personal
property
under
corporate
income
14
tax
and
franchise
tax.
15
Sec.
15.
RETROACTIVE
APPLICABILITY.
The
following
apply
16
retroactively
to
January
1,
2019,
for
tax
years
beginning
on
17
or
after
that
date:
18
1.
The
section
of
this
division
of
this
Act
amending
section
19
422.4,
subsection
16,
paragraph
“e”,
unnumbered
paragraph
1.
20
2.
The
sections
of
this
division
of
this
Act
amending
21
section
422.9,
subsection
2A.
22
3.
The
section
of
this
division
of
this
Act
amending
section
23
422.12C,
subsection
4.
24
4.
The
section
of
this
division
of
this
Act
amending
section
25
422.60,
subsection
2,
paragraph
“b”.
26
Sec.
16.
RETROACTIVE
APPLICABILITY
——
LIKE-KIND
EXCHANGES
27
OF
PERSONAL
PROPERTY.
The
section
of
this
division
of
this
28
Act
relating
to
like-kind
exchanges
of
personal
property
under
29
corporate
income
tax
and
franchise
tax
applies
retroactively
to
30
January
1,
2019,
for
tax
years
beginning
on
or
after
that
date,
31
but
before
January
1,
2020.
32
DIVISION
II
33
ADMINISTRATIVE
PROVISIONS
34
Sec.
17.
Section
422.20,
Code
2019,
is
amended
by
adding
the
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following
new
subsection:
1
NEW
SUBSECTION
.
5.
The
department
may
permit,
by
rule,
the
2
disclosure
of
state
tax
information
to
a
person
a
taxpayer
has
3
authorized
to
receive
such
state
tax
information,
in
the
manner
4
prescribed
by
the
department.
5
Sec.
18.
Section
422.72,
Code
2019,
is
amended
by
adding
the
6
following
new
subsection:
7
NEW
SUBSECTION
.
8.
The
department
may
permit,
by
rule,
the
8
disclosure
of
state
tax
information
to
a
person
a
taxpayer
has
9
authorized
to
receive
such
state
tax
information,
in
the
manner
10
prescribed
by
the
department.
11
DIVISION
III
12
SALES
AND
USE
TAX
13
Sec.
19.
Section
423.2,
subsection
1,
paragraph
a,
14
subparagraph
(5),
subparagraph
division
(a),
Code
2019,
is
15
amended
to
read
as
follows:
16
(a)
If
a
service
or
warranty
contract
does
not
specify
a
fee
17
amount
for
nontaxable
services
or
taxable
personal
property,
18
the
tax
imposed
pursuant
to
this
section
shall
be
imposed
upon
19
an
amount
equal
to
one-half
of
the
sales
price
of
the
contract.
20
Sec.
20.
Section
423.2,
subsection
6,
paragraph
k,
Code
21
2019,
is
amended
to
read
as
follows:
22
k.
Carpentry
repair
and
installation
.
23
Sec.
21.
Section
423.3,
Code
2019,
is
amended
by
adding
the
24
following
new
subsection:
25
NEW
SUBSECTION
.
16A.
a.
The
sales
price
from
the
sale
of
26
a
grain
bin,
including
material
or
replacement
parts
used
to
27
construct
or
repair
a
grain
bin.
28
b.
For
purposes
of
this
subsection,
“grain
bin”
means
29
property
that
is
vented
and
covered
with
corrugated
metal
or
30
similar
material,
and
that
is
primarily
used
to
hold
loose
31
grain
for
drying
or
storage.
32
Sec.
22.
Section
423.3,
subsection
47,
paragraph
c,
33
subparagraph
(3),
Code
2019,
is
amended
by
striking
the
34
subparagraph
and
inserting
in
lieu
thereof
the
following:
35
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(3)
The
following
within
the
scope
of
section
427A.1,
1
subsection
1,
paragraphs
“h”
and
“i”
:
2
(a)
Computers.
3
(b)
Machinery.
4
(c)
Equipment,
including
pollution
control
equipment.
5
(d)
Replacement
parts.
6
(e)
Supplies.
7
(f)
Materials
used
to
construct
or
self-construct
the
8
following:
9
(i)
Computers.
10
(ii)
Machinery.
11
(iii)
Equipment,
including
pollution
control
equipment.
12
(iv)
Replacement
parts.
13
(v)
Supplies.
14
Sec.
23.
Section
423.3,
subsection
104,
paragraph
a,
Code
15
2019,
is
amended
to
read
as
follows:
16
a.
The
sales
price
of
specified
digital
products
and
of
17
prewritten
computer
software
sold,
and
of
enumerated
services
18
described
in
section
423.2,
subsection
1,
paragraph
“a”
,
19
subparagraph
(5),
or
section
423.2,
subsection
6
,
paragraphs
20
“bq”
,
“br”
,
“bs”
,
and
“bu”
furnished,
to
a
commercial
enterprise
21
for
use
exclusively
by
the
commercial
enterprise.
The
use
of
22
prewritten
computer
software,
a
specified
digital
product,
or
23
service
fails
to
qualify
as
a
use
exclusively
by
the
commercial
24
enterprise
if
its
use
for
noncommercial
purposes
is
more
than
25
de
minimis.
26
Sec.
24.
Section
423.14A,
subsection
3,
paragraph
b,
Code
27
2019,
is
amended
by
striking
the
paragraph.
28
Sec.
25.
Section
423.14A,
subsection
3,
paragraph
d,
29
subparagraph
(1),
Code
2019,
is
amended
to
read
as
follows:
30
(1)
A
marketplace
facilitator
that
makes
or
facilitates
31
Iowa
sales
on
its
own
behalf
or
for
one
or
more
marketplace
32
sellers
equal
to
or
exceeding
one
hundred
thousand
dollars
,
33
or
in
two
hundred
or
more
separate
transactions,
for
an
34
immediately
preceding
calendar
year
or
a
current
calendar
year.
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Sec.
26.
Section
423.14A,
subsection
3,
paragraph
e,
1
subparagraph
(1),
unnumbered
paragraph
1,
Code
2019,
is
amended
2
to
read
as
follows:
3
A
referrer
if,
for
any
immediately
preceding
calendar
year
4
or
a
current
calendar
year,
one
hundred
thousand
dollars
or
5
more
in
Iowa
sales
or
two
hundred
or
more
separate
Iowa
sales
6
transactions
result
from
referrals
from
a
platform
of
the
7
referrer.
A
referrer
is
not
required
to
collect
and
remit
8
sales
and
use
tax
pursuant
to
this
paragraph
if
the
referrer
9
does
all
of
the
following:
10
Sec.
27.
Section
423.14A,
subsection
3,
paragraph
e,
11
subparagraph
(1),
subparagraph
division
(c),
unnumbered
12
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
13
The
referrer
provides
the
department
with
monthly
annual
14
reports
in
an
electronic
format
and
in
the
manner
prescribed
15
by
the
department,
which
monthly
annual
reports
contain
all
of
16
the
following:
17
Sec.
28.
Section
423.14A,
subsection
3,
paragraph
e,
Code
18
2019,
is
amended
by
adding
the
following
new
subparagraph:
19
NEW
SUBPARAGRAPH
.
(5)
This
paragraph
is
subject
to
20
implementation
by
the
department
by
rule
and
shall
not
require
21
a
referrer
to
collect
tax
or
comply
with
the
notice
and
22
reporting
requirements
and
other
provisions
of
this
paragraph
23
unless
and
until
such
administrative
rules
take
effect.
24
Sec.
29.
Section
423.48,
subsection
2,
paragraph
c,
Code
25
2019,
is
amended
by
striking
the
paragraph.
26
Sec.
30.
TAXATION
AND
EXEMPTION
OF
COMPUTERS
TASK
FORCE.
A
27
taxation
and
exemption
of
computers
task
force
is
created.
The
28
department
of
revenue
shall
initiate
and
coordinate
the
task
29
force
and
provide
staff
assistance.
It
is
the
intent
of
the
30
general
assembly
that
the
task
force
include
representatives
of
31
the
department
of
revenue;
a
commercial
enterprise
that
claims
32
an
exemption
for
computers
under
section
423.3,
subsection
33
47;
an
association
that
represents
manufacturers
and
other
34
industrial
producers;
and
an
association
that
represents
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business
tax
issues.
The
director
of
revenue
or
the
director’s
1
designee
shall
serve
as
chairperson
of
the
task
force.
2
The
task
force
shall
be
charged
with
reviewing
the
3
definition
of
“computer”
as
used
throughout
the
portions
of
the
4
Iowa
Code
and
the
Iowa
Administrative
Code
administered
by
the
5
department
of
revenue
including
the
exemption
for
computers
6
provided
in
section
423.3,
subsection
47,
paragraph
“a”,
7
subparagraph
(4).
If
the
task
force
recommends
modifications
8
to
the
current
definition
of
“computer”
including
the
exemption
9
for
computers
provided
in
section
423.3,
subsection
47,
10
paragraph
“a”,
subparagraph
(4),
the
department
of
revenue
11
shall
provide
any
recommendations
to
the
general
assembly
by
12
January
1,
2020.
13
Sec.
31.
REFUNDS.
Refunds
of
taxes,
interest,
or
penalties
14
that
arise
from
claims
resulting
from
the
enactment
of
section
15
423.3,
subsection
16A,
for
sales
occurring
between
January
16
1,
2004,
and
the
effective
date
of
the
enactment
of
section
17
423.3,
subsection
16A,
shall
be
limited
to
twenty-five
thousand
18
dollars
in
the
aggregate
and
shall
not
be
allowed
unless
refund
19
claims
are
filed
prior
to
October
1,
2019,
notwithstanding
any
20
other
law
to
the
contrary.
If
the
amount
of
claims
totals
21
more
than
twenty-five
thousand
dollars
in
the
aggregate,
the
22
department
of
revenue
shall
prorate
the
twenty-five
thousand
23
dollars
among
all
claimants
in
relation
to
the
amounts
of
the
24
claimants’
valid
claims.
25
Sec.
32.
EFFECTIVE
DATE.
The
following,
being
deemed
of
26
immediate
importance,
take
effect
upon
enactment:
27
1.
The
section
of
this
division
of
this
Act
enacting
section
28
423.3,
subsection
16A.
29
2.
The
section
of
this
division
of
this
Act
amending
section
30
423.3,
subsection
47,
paragraph
“c”,
subparagraph
(3).
31
3.
The
section
of
this
division
of
this
Act
relating
to
32
refunds
that
arise
from
claims
resulting
from
the
enactment
of
33
section
423.3,
subsection
16A.
34
Sec.
33.
RETROACTIVE
APPLICABILITY.
The
following
applies
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retroactively
to
January
1,
2016,
for
tax
years
beginning
on
1
or
after
that
date:
2
The
section
of
this
division
of
this
Act
amending
section
3
423.3,
subsection
47,
paragraph
“c”,
subparagraph
(3).
4
Sec.
34.
RETROACTIVE
APPLICABILITY.
The
following
applies
5
retroactively
to
tax
years
beginning
on
or
after
January
1,
6
2004:
7
The
section
of
this
division
of
this
Act
enacting
section
8
423.3,
subsection
16A.
9
DIVISION
IV
10
AUTOMOBILE
RENTAL
EXCISE
TAX
11
Sec.
35.
Section
423.14A,
subsection
1,
paragraph
b,
12
subparagraph
(3),
Code
2019,
is
amended
to
read
as
follows:
13
(3)
A
“rental
platform”
,
as
defined
in
section
423C.2
,
that
14
meets
the
requirements
described
in
person
who
is
not
required
15
to
collect
and
remit
automobile
rental
excise
tax
pursuant
to
16
section
423C.3,
subsection
3
,
paragraph
“c”
,
subparagraph
(2),
17
shall
not
be
considered
a
“marketplace
facilitator”
with
respect
18
to
any
sale
of
a
transportation
service
under
section
423.2,
19
subsection
6
,
paragraph
“bf”
,
or
section
423.5,
subsection
1
,
20
paragraph
“e”
,
consisting
of
the
rental
of
vehicles
subject
21
to
registration
which
are
registered
for
a
gross
weight
of
22
thirteen
tons
or
less
for
a
period
of
sixty
days
or
less.
23
Sec.
36.
Section
423C.2,
subsection
3,
paragraphs
a
and
b,
24
Code
2019,
are
amended
to
read
as
follows:
25
a.
A
person
or
any
affiliate
of
a
person
that
owns
or
26
controls
an
automobile
and
makes
the
automobile
available
for
27
rent
through
the
person
or
any
affiliate,
or
through
a
rental
28
platform
or
rental
facilitator
any
other
person
required
to
29
collect
sales
or
use
tax
under
chapter
423
.
30
b.
A
person
or
any
affiliate
of
a
person
who
possesses
or
31
acquires
a
right
or
interest
in
any
automobile
with
an
intent
32
to
rent
the
automobile
to
another
person
,
or
through
the
person
33
or
any
affiliate,
or
through
a
rental
platform
or
a
rental
34
facilitator
any
other
person
required
to
collect
sales
or
use
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tax
under
chapter
423
.
1
Sec.
37.
Section
423C.2,
subsection
6,
Code
2019,
is
amended
2
to
read
as
follows:
3
6.
“Facilitation
fee”
means
any
consideration,
by
whatever
4
name
called,
that
a
rental
facilitator
or
a
rental
platform
5
person
charges
to
a
user
for
facilitating
the
user’s
rental
6
of
an
automobile.
“Facilitation
fee”
does
not
include
any
7
commission
an
automobile
provider
pays
to
a
rental
facilitator
8
or
a
rental
platform
person
for
facilitating
the
rental
of
an
9
automobile.
10
Sec.
38.
Section
423C.2,
subsections
9
and
10,
Code
2019,
11
are
amended
by
striking
the
subsections.
12
Sec.
39.
Section
423C.2,
subsection
11,
Code
2019,
is
13
amended
to
read
as
follows:
14
11.
“Rental
price”
means
all
consideration
charged
for
15
the
renting
and
facilitation
of
renting
of
an
automobile
16
before
taxes,
including
but
not
limited
to
facilitation
fees,
17
reservation
fees,
services
fees,
nonrefundable
deposits,
and
18
any
other
direct
or
indirect
charge
made
or
consideration
19
provided
in
connection
with
the
renting
or
facilitation
of
20
renting
of
an
automobile
the
same
as
“sales
price”
as
defined
21
in
section
423.1,
which
term
includes
but
is
not
limited
22
to
facilitation
fees,
reservation
fees,
services
fees,
23
nonrefundable
deposits,
and
any
other
direct
or
indirect
charge
24
made
or
consideration
provided
in
connection
with
the
renting
25
or
facilitation
of
renting
an
automobile
.
26
Sec.
40.
Section
423C.3,
Code
2019,
is
amended
to
read
as
27
follows:
28
423C.3
Tax
on
rental
of
automobiles
——
collection
and
29
remittance
of
tax.
30
1.
For
purposes
of
this
section
:
31
a.
“Discount
rental
charge”
means
the
amount
an
automobile
32
provider
charges
to
a
rental
facilitator
for
the
rental
of
an
33
automobile,
excluding
any
applicable
tax.
34
b.
“Travel
package”
means
an
automobile
rental
bundled
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with
one
or
more
separate
components
such
as
lodging,
air
1
transportation,
or
similar
items
and
charged
for
a
single
2
retail
price.
3
2.
1.
A
tax
of
five
percent
is
imposed
upon
the
rental
4
price
of
an
automobile
if
the
rental
transaction
is
subject
to
5
the
sales
and
services
tax
under
chapter
423,
subchapter
II
,
or
6
the
use
tax
under
chapter
423,
subchapter
III
.
The
tax
shall
7
not
be
imposed
on
any
rental
transaction
not
taxable
under
the
8
state
sales
and
services
tax,
as
provided
in
section
423.3
,
or
9
the
state
use
tax,
as
provided
in
section
423.6
,
on
automobile
10
rental
receipts.
11
3.
2.
This
subsection
shall
govern
the
collection
and
12
remittance
of
the
tax
imposed
under
subsection
2
The
tax
13
imposed
under
subsection
1
shall
be
collected
and
remitted
to
14
the
department
by
all
persons
required
to
collect
state
sales
15
and
use
tax
on
the
rental
transaction
under
chapter
423
.
16
a.
Unless
otherwise
provided
in
this
subsection
,
the
17
automobile
provider
shall
collect
the
tax
by
adding
the
tax
to
18
the
rental
price
of
the
automobile
and
the
tax,
when
collected,
19
shall
be
stated
as
a
distinct
item
separate
and
apart
from
20
the
rental
price
of
the
automobile
and
the
sales
and
services
21
tax
imposed
under
chapter
423,
subchapter
II
,
or
the
use
tax
22
imposed
under
chapter
423,
subchapter
III
.
23
b.
If
a
transaction
for
the
rental
of
an
automobile
involves
24
a
rental
facilitator,
all
of
the
following
shall
occur
in
the
25
order
prescribed:
26
(1)
The
rental
facilitator
shall
collect
the
tax
on
any
27
rental
price
that
the
user
pays
to
the
rental
facilitator
in
28
the
same
manner
as
an
automobile
provider
under
paragraph
“a”
.
29
(2)
(a)
Unless
otherwise
required
by
rule
or
order
of
30
the
department,
the
rental
facilitator
shall
remit
to
the
31
automobile
provider
that
portion
of
the
tax
collected
on
the
32
rental
price
that
represents
the
discount
rental
charge.
33
(b)
No
assessment
shall
be
made
against
a
rental
facilitator
34
for
tax
due
on
a
discount
rental
charge
if
the
rental
35
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facilitator
collected
the
tax
and
remitted
it
to
an
automobile
1
provider
that
has
a
valid
tax
permit
required
under
this
2
chapter
or
under
chapter
423
.
This
subparagraph
division
shall
3
not
apply
if
the
rental
facilitator
and
automobile
provider
4
are
affiliates,
or
if
the
department
requires
the
rental
5
facilitator
to
remit
taxes
collected
on
that
portion
of
the
6
sales
price
that
represents
the
discount
rental
charge
directly
7
to
the
department.
8
(3)
The
rental
facilitator
shall
remit
any
remaining
tax
it
9
collected
to
the
department.
10
(4)
(a)
The
automobile
provider
shall
collect
and
remit
11
to
the
department
any
taxes
the
rental
facilitator
remitted
to
12
the
automobile
provider,
and
shall
collect
and
remit
to
the
13
department
any
taxes
due
on
any
amount
of
rental
price
the
user
14
paid
to
the
automobile
provider.
15
(b)
No
assessment
shall
be
made
against
an
automobile
16
provider
for
any
tax
due
on
a
discount
rental
charge
that
17
was
not
remitted
to
the
automobile
provider
by
a
rental
18
facilitator.
This
subparagraph
division
shall
not
apply
if
the
19
automobile
provider
and
the
rental
facilitator
are
affiliates.
20
(5)
Notwithstanding
any
other
provision
of
this
paragraph
21
to
the
contrary,
if
a
rental
facilitator
and
its
affiliates
22
facilitate
total
rentals
under
this
chapter
and
chapter
23
423A
that
are
equal
to
or
less
than
an
aggregate
amount
of
24
rental
price
and
sales
price
of
ten
thousand
dollars
for
an
25
immediately
preceding
calendar
year
or
a
current
calendar
year,
26
or
in
ten
or
fewer
separate
transactions
for
an
immediately
27
preceding
calendar
year
or
a
current
calendar
year,
the
28
rental
facilitator
shall
not
be
required
to
collect
tax
on
the
29
amount
of
sales
price
that
represents
the
rental
facilitator’s
30
facilitation
fee.
31
c.
(1)
If
a
transaction
for
the
rental
of
an
automobile
32
involves
a
rental
platform,
other
than
a
rental
platform
33
described
in
subparagraph
(2),
the
rental
platform
shall
34
collect
and
remit
the
tax
imposed
under
this
chapter
in
the
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same
manner
as
an
automobile
provider
under
paragraph
“a”
.
1
(2)
3.
A
rental
platform
person
is
not
required
to
collect
2
and
remit
the
tax
imposed
under
this
chapter
in
the
same
manner
3
as
an
automobile
provider
under
paragraph
“a”
if
the
rental
4
platform
person
meets
all
of
the
following
requirements:
5
a.
The
person
or
any
affiliate
of
the
person
is
not
an
6
automobile
provider.
7
b.
The
person
or
any
affiliate
of
the
person
facilitates
the
8
renting
of
an
automobile
by
doing
all
of
the
following:
9
(1)
The
person
owns,
operates,
or
controls
an
automobile
10
rental
marketplace
that
allows
an
automobile
provider
who
is
11
not
an
affiliate
of
the
person
to
offer
or
list
an
automobile
12
for
rent
on
the
marketplace.
For
purposes
of
this
paragraph,
13
it
is
immaterial
whether
or
not
the
automobile
provider
has
14
a
tax
permit
under
this
chapter
or
chapter
423
or
whether
15
the
automobile
is
owned
by
a
natural
person
or
by
a
business
16
entity.
17
(2)
The
person
or
affiliate
of
the
person
collects
or
18
processes
the
rental
price
charged
to
the
user.
19
(a)
c.
The
only
sales
the
rental
platform
person
and
20
its
affiliates
of
the
person
facilitate
that
are
subject
to
21
tax
under
chapter
423
are
sales
of
a
transportation
service
22
under
section
423.2,
subsection
6
,
paragraph
“bf”
,
or
section
23
423.5,
subsection
1
,
paragraph
“e”
,
consisting
of
the
rental
24
of
vehicles
subject
to
registration
which
are
registered
for
25
a
gross
weight
of
thirteen
tons
or
less
for
a
period
of
sixty
26
days
or
less.
27
(b)
d.
The
rental
platform
person
operates
a
peer-to-peer
28
automobile
sharing
marketplace.
29
(3)
4.
For
any
rental
transaction
for
which
the
rental
30
platform
a
person
is
required
to
or
elects
to
collect
and
31
remit
the
tax
under
this
chapter
,
the
rental
platform
person
32
shall
also
be
liable
for
the
collection
and
remittance
of
any
33
sales
or
use
tax
due
on
that
transaction
under
section
423.2,
34
subsection
6
,
paragraph
“bf”
,
or
section
423.5,
subsection
35
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1
,
paragraph
“e”
,
notwithstanding
any
other
provision
to
the
1
contrary
in
chapter
423
.
2
(4)
5.
For
any
rental
transaction
for
which
the
rental
3
platform
person
is
not
required
to
collect
and
remit
the
4
tax
under
this
chapter
as
provided
under
subparagraph
(2)
5
subsection
3
,
the
automobile
provider
shall
be
solely
liable
6
for
any
amount
of
uncollected
or
unremitted
tax
under
this
7
chapter
and
chapter
423
.
8
DIVISION
V
9
TELEPHONE
COMPANY
PROPERTY
10
Sec.
41.
Section
476.1D,
Code
2019,
is
amended
by
adding
the
11
following
new
subsection:
12
NEW
SUBSECTION
.
10.
a.
The
board,
at
the
request
of
a
13
long
distance
telephone
company,
shall
classify
such
company
14
as
a
competitive
long
distance
telephone
company
if
more
15
than
half
of
the
company’s
revenues
from
its
Iowa
intrastate
16
telecommunications
services
and
facilities
are
received
17
from
services
and
facilities
that
the
board
has
determined
18
to
be
subject
to
effective
competition,
or
if
more
than
19
half
of
the
company’s
revenues
from
its
Iowa
intrastate
20
telecommunications
services
and
facilities
are
received
from
21
intralata
interexchange
services
and
facilities.
For
purposes
22
of
this
subsection,
“intralata
interexchange
services”
means
23
those
interexchange
services
that
originate
and
terminate
24
within
the
same
local
access
transport
area.
25
b.
The
board
shall
promptly
notify
the
director
of
revenue
26
that
a
long
distance
telephone
company
has
been
classified
27
as
a
competitive
long
distance
telephone
company.
Upon
such
28
notification
by
the
board,
the
director
of
revenue
shall
assess
29
the
property
of
such
competitive
long
distance
telephone
30
company,
which
property
is
first
assessed
for
taxation
in
this
31
state
on
or
after
January
1,
1996,
in
the
same
manner
as
all
32
other
property
assessed
as
commercial
property
by
the
local
33
assessor
under
chapters
427,
427A,
427B,
428,
and
441.
As
used
34
in
this
section,
“long
distance
telephone
company”
means
an
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entity
that
provides
telephone
service
and
facilities
between
1
local
exchanges,
but
does
not
include
a
cellular
service
2
provider
or
a
local
exchange
utility
holding
a
certificate
3
issued
under
section
476.29,
subsection
12.
4
Sec.
42.
Section
476.1D,
subsection
10,
as
enacted
in
this
5
division
of
this
Act,
is
amended
by
striking
the
subsection.
6
Sec.
43.
EFFECTIVE
DATE.
The
following,
being
deemed
of
7
immediate
importance,
takes
effect
upon
enactment:
8
The
section
of
this
division
of
this
Act
enacting
section
9
476.1D,
subsection
10.
10
Sec.
44.
RETROACTIVE
APPLICABILITY.
The
following
applies
11
retroactively
to
July
1,
2018,
for
assessment
years
beginning
12
on
or
after
that
date:
13
The
section
of
this
division
of
this
Act
enacting
section
14
476.1D,
subsection
10.
15
Sec.
45.
EFFECTIVE
DATE.
The
following
takes
effect
July
16
1,
2021:
17
The
section
of
this
division
of
this
Act
striking
section
18
476.1D,
subsection
10.
19
Sec.
46.
APPLICABILITY.
The
following
applies
to
20
assessment
years
beginning
on
or
after
January
1,
2022:
21
The
section
of
this
division
of
this
Act
striking
section
22
476.1D,
subsection
10.
23
DIVISION
VI
24
CHILD
AND
DEPENDENT
CARE
CREDIT
AND
EARLY
CHILDHOOD
DEVELOPMENT
25
CREDIT
26
Sec.
47.
Section
422.12C,
subsection
1,
Code
2019,
is
27
amended
to
read
as
follows:
28
1.
The
taxes
imposed
under
this
division
,
less
the
amounts
29
of
nonrefundable
credits
allowed
under
this
division
,
shall
30
be
reduced
by
a
child
and
dependent
care
credit
equal
to
the
31
following
percentages
of
the
federal
child
and
dependent
care
32
credit
provided
in
section
21
of
the
Internal
Revenue
Code,
33
without
regard
to
whether
or
not
the
federal
credit
was
limited
34
by
the
taxpayer’s
federal
tax
liability:
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a.
For
a
taxpayer
with
net
income
of
less
than
ten
twelve
1
thousand
seven
hundred
fifty
dollars,
seventy-five
percent.
2
b.
For
a
taxpayer
with
net
income
of
ten
twelve
thousand
3
seven
hundred
fifty
dollars
or
more
but
less
than
twenty
4
twenty-five
thousand
four
hundred
ninety
dollars,
sixty-five
5
percent.
6
c.
For
a
taxpayer
with
net
income
of
twenty
twenty-five
7
thousand
four
hundred
ninety
dollars
or
more
but
less
than
8
twenty-five
thirty-one
thousand
eight
hundred
sixty
dollars,
9
fifty-five
percent.
10
d.
For
a
taxpayer
with
net
income
of
twenty-five
thirty-one
11
thousand
eight
hundred
sixty
dollars
or
more
but
less
than
12
thirty-five
forty-four
thousand
six
hundred
ten
dollars,
fifty
13
percent.
14
e.
For
a
taxpayer
with
net
income
of
thirty-five
forty-four
15
thousand
six
hundred
ten
dollars
or
more
but
less
than
forty
16
fifty
thousand
nine
hundred
eighty
dollars,
forty
percent.
17
f.
For
a
taxpayer
with
net
income
of
forty
fifty
thousand
18
nine
hundred
eighty
dollars
or
more
but
less
than
forty-five
19
fifty-seven
thousand
three
hundred
sixty
dollars,
thirty
20
percent.
21
g.
For
a
taxpayer
with
net
income
of
forty-five
fifty-seven
22
thousand
three
hundred
sixty
dollars
or
more,
zero
percent.
23
Sec.
48.
Section
422.12C,
subsection
2,
paragraph
a,
Code
24
2019,
is
amended
to
read
as
follows:
25
a.
The
taxes
imposed
under
this
division
,
less
the
amounts
26
of
nonrefundable
credits
allowed
under
this
division
,
may
be
27
reduced
by
an
early
childhood
development
tax
credit
equal
to
28
twenty-five
percent
of
the
first
one
thousand
dollars
which
29
the
taxpayer
has
paid
to
others
for
each
dependent,
as
defined
30
in
the
Internal
Revenue
Code,
ages
three
through
five
for
31
early
childhood
development
expenses.
In
determining
the
32
amount
of
early
childhood
development
expenses
for
the
tax
year
33
beginning
in
the
2006
calendar
year
only,
such
expenses
paid
34
during
November
and
December
of
the
previous
tax
year
shall
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be
considered
paid
in
the
tax
year
for
which
the
tax
credit
1
is
claimed.
This
credit
is
available
to
a
taxpayer
whose
net
2
income
is
less
than
forty-five
fifty-seven
thousand
three
3
hundred
sixty
dollars.
If
the
early
childhood
development
4
tax
credit
is
claimed
for
a
tax
year,
the
taxpayer
and
the
5
taxpayer’s
spouse
shall
not
claim
the
child
and
dependent
care
6
credit
under
subsection
1
.
7
Sec.
49.
Section
422.12C,
Code
2019,
is
amended
by
adding
8
the
following
new
subsection:
9
NEW
SUBSECTION
.
5.
a.
Upon
determination
of
the
latest
10
cumulative
inflation
factor,
the
director
shall
multiply
11
each
net
income
level
set
forth
in
subsection
1
or
2
by
this
12
cumulative
inflation
factor,
shall
round
off
the
resulting
13
product
to
the
nearest
one
dollar,
and
shall
incorporate
the
14
result
into
the
net
income
levels
in
subsection
1
or
2
for
each
15
tax
year
beginning
on
or
after
January
1,
2019.
16
b.
For
purposes
of
this
subsection,
“cumulative
inflation
17
factor”
means
the
product
of
the
annual
inflation
factor
for
18
the
2019
calendar
year
and
all
annual
inflation
factors
for
19
subsequent
calendar
years
as
determined
by
section
422.4,
20
subsection
1,
paragraph
“a”
.
The
cumulative
inflation
factor
21
applies
to
all
tax
years
beginning
on
or
after
January
1
of
22
the
calendar
year
for
which
the
latest
annual
inflation
factor
23
has
been
determined.
Notwithstanding
any
other
provision,
24
the
annual
inflation
factor
for
the
2019
calendar
year
is
one
25
hundred
percent.
26
Sec.
50.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
27
deemed
of
immediate
importance,
takes
effect
upon
enactment.
28
Sec.
51.
RETROACTIVE
APPLICABILITY.
This
division
of
this
29
Act
applies
retroactively
to
tax
years
beginning
on
or
after
30
January
1,
2019.
31
DIVISION
VII
32
APPORTIONMENT
OF
CERTAIN
BUSINESS
INCOME
OF
AN
AIRLINE
33
Sec.
52.
Section
422.33,
subsection
2,
paragraph
a,
34
subparagraph
(2),
Code
2019,
is
amended
by
adding
the
following
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new
subparagraph
divisions:
1
NEW
SUBPARAGRAPH
DIVISION
.
(0f)
Notwithstanding
2
subparagraph
division
(c),
where
income
is
derived
by
an
3
airline
from
transportation
operations,
the
part
attributable
4
to
business
within
the
state
shall
be
in
the
proportion
that
5
the
miles
of
the
airline
traveled
in
this
state
bears
to
the
6
total
miles
of
such
airline
traveled
everywhere.
7
NEW
SUBPARAGRAPH
DIVISION
.
(00f)
(i)
Notwithstanding
8
subparagraph
division
(c),
where
income
is
derived
by
a
9
qualified
air
freight
forwarder
from
transportation
operations
10
through
an
affiliated
airline,
such
income
shall
be
apportioned
11
as
follows:
12
(A)
For
tax
years
beginning
during
the
2020
calendar
year,
13
ninety
percent
of
such
income
shall
be
equitably
apportioned
14
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
15
ten
percent
of
such
income,
the
part
attributable
to
business
16
within
the
state
shall
be
in
the
proportion
that
the
miles
17
of
the
qualified
air
freight
forwarder’s
affiliated
airline
18
traveled
in
this
state
bears
to
the
total
miles
of
the
19
affiliated
airline
traveled
everywhere.
20
(B)
For
tax
years
beginning
during
the
2021
calendar
year,
21
eighty
percent
of
such
income
shall
be
equitably
apportioned
22
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
23
twenty
percent
of
such
income,
the
part
attributable
to
24
business
within
the
state
shall
be
in
the
proportion
that
the
25
miles
of
the
qualified
air
freight
forwarder’s
affiliated
26
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
27
affiliated
airline
traveled
everywhere.
28
(C)
For
tax
years
beginning
during
the
2022
calendar
year,
29
seventy
percent
of
such
income
shall
be
equitably
apportioned
30
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
31
thirty
percent
of
such
income,
the
part
attributable
to
32
business
within
the
state
shall
be
in
the
proportion
that
the
33
miles
of
the
qualified
air
freight
forwarder’s
affiliated
34
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
35
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affiliated
airline
traveled
everywhere.
1
(D)
For
tax
years
beginning
during
the
2023
calendar
year,
2
sixty
percent
of
such
income
shall
be
equitably
apportioned
as
3
provided
in
subparagraph
division
(c),
and
of
the
remaining
4
forty
percent
of
such
income,
the
part
attributable
to
business
5
within
the
state
shall
be
in
the
proportion
that
the
miles
6
of
the
qualified
air
freight
forwarder’s
affiliated
airline
7
traveled
in
this
state
bears
to
the
total
miles
of
the
8
affiliated
airline
traveled
everywhere.
9
(E)
For
tax
years
beginning
during
the
2024
calendar
year,
10
fifty
percent
of
such
income
shall
be
equitably
apportioned
as
11
provided
in
subparagraph
division
(c),
and
of
the
remaining
12
fifty
percent
of
such
income,
the
part
attributable
to
business
13
within
the
state
shall
be
in
the
proportion
that
the
miles
14
of
the
qualified
air
freight
forwarder’s
affiliated
airline
15
traveled
in
this
state
bears
to
the
total
miles
of
the
16
affiliated
airline
traveled
everywhere.
17
(F)
For
tax
years
beginning
during
the
2025
calendar
year,
18
forty
percent
of
such
income
shall
be
equitably
apportioned
as
19
provided
in
subparagraph
division
(c),
and
of
the
remaining
20
sixty
percent
of
such
income,
the
part
attributable
to
business
21
within
the
state
shall
be
in
the
proportion
that
the
miles
22
of
the
qualified
air
freight
forwarder’s
affiliated
airline
23
traveled
in
this
state
bears
to
the
total
miles
of
the
24
affiliated
airline
traveled
everywhere.
25
(G)
For
tax
years
beginning
during
the
2026
calendar
year,
26
thirty
percent
of
such
income
shall
be
equitably
apportioned
27
as
provided
in
subparagraph
division
(c),
and
of
the
remaining
28
seventy
percent
of
such
income,
the
part
attributable
to
29
business
within
the
state
shall
be
in
the
proportion
that
the
30
miles
of
the
qualified
air
freight
forwarder’s
affiliated
31
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
32
affiliated
airline
traveled
everywhere.
33
(H)
For
tax
years
beginning
during
the
2027
calendar
year,
34
twenty
percent
of
such
income
shall
be
equitably
apportioned
35
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as
provided
in
subparagraph
division
(c),
and
of
the
remaining
1
eighty
percent
of
such
income,
the
part
attributable
to
2
business
within
the
state
shall
be
in
the
proportion
that
the
3
miles
of
the
qualified
air
freight
forwarder’s
affiliated
4
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
5
affiliated
airline
traveled
everywhere.
6
(I)
For
tax
years
beginning
during
the
2028
calendar
year,
7
ten
percent
of
such
income
shall
be
equitably
apportioned
as
8
provided
in
subparagraph
division
(c),
and
of
the
remaining
9
ninety
percent
of
such
income,
the
part
attributable
to
10
business
within
the
state
shall
be
in
the
proportion
that
the
11
miles
of
the
qualified
air
freight
forwarder’s
affiliated
12
airline
traveled
in
this
state
bears
to
the
total
miles
of
the
13
affiliated
airline
traveled
everywhere.
14
(J)
For
tax
years
beginning
on
or
after
January
1,
2029,
15
the
part
attributable
to
business
within
the
state
shall
be
16
in
the
proportion
that
the
miles
of
the
qualified
air
freight
17
forwarder’s
affiliated
airline
traveled
in
this
state
bears
to
18
the
total
miles
of
the
affiliated
airline
traveled
everywhere.
19
(ii)
For
purposes
of
this
subparagraph
division
(00f),
20
“qualified
air
freight
forwarder”
means
a
taxpayer
who
meets
all
21
of
the
following
requirements:
22
(A)
The
taxpayer
is
primarily
engaged
in
the
facilitation
of
23
the
transportation
of
property
by
air.
24
(B)
The
taxpayer
does
not
itself
operate
aircraft.
25
(C)
The
taxpayer
is
in
the
same
affiliated
group
as
an
26
airline.
27
Sec.
53.
Section
422.33,
subsection
2,
paragraph
a,
28
subparagraph
(2),
subparagraph
division
(g),
Code
2019,
is
29
amended
to
read
as
follows:
30
(g)
Where
income
consists
of
more
than
one
class
of
income
31
as
provided
in
subparagraph
divisions
(a)
through
(e)
(00f)
32
of
this
subparagraph,
it
shall
be
reasonably
apportioned
by
33
the
business
activity
ratio
provided
in
rules
adopted
by
the
34
director.
35
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Sec.
54.
APPLICABILITY.
This
division
of
this
Act
applies
1
to
tax
years
beginning
on
or
after
January
1,
2020.
2
DIVISION
VIII
3
BURIAL
TRUSTS
4
Sec.
55.
Section
422.7,
Code
2019,
is
amended
by
adding
the
5
following
new
subsection:
6
NEW
SUBSECTION
.
6.
Subtract,
to
the
extent
included,
income
7
from
interest
and
earnings
received
from
a
burial
trust
fund
8
as
defined
in
section
523A.102.
9
DIVISION
IX
10
ADOPTION
TAX
CREDIT
11
Sec.
56.
Section
422.12A,
subsection
2,
Code
2019,
is
12
amended
to
read
as
follows:
13
2.
The
taxes
imposed
under
this
division
,
less
the
credits
14
allowed
under
section
422.12
,
shall
be
reduced
by
an
adoption
15
tax
credit
equal
to
the
amount
of
qualified
adoption
expenses
16
paid
or
incurred
by
the
taxpayer
during
the
tax
year
in
17
connection
with
the
adoption
of
a
child
by
the
taxpayer,
not
to
18
exceed
five
thousand
dollars
per
adoption.
19
Sec.
57.
Section
422.12A,
Code
2019,
is
amended
by
adding
20
the
following
new
subsection:
21
NEW
SUBSECTION
.
3A.
The
credit
under
this
section
with
22
respect
to
any
qualified
adoption
expense
shall
be
allowed
23
during
a
tax
year
as
follows:
24
a.
For
any
qualified
adoption
expense
paid
or
incurred
prior
25
to
or
during
the
tax
year
in
which
the
adoption
becomes
final,
26
the
tax
year
in
which
the
adoption
becomes
final.
27
b.
For
any
qualified
adoption
expense
paid
or
incurred
after
28
the
tax
year
in
which
the
adoption
becomes
final,
the
tax
year
29
in
which
an
adoption
expense
is
paid
or
incurred.
30
Sec.
58.
RETROACTIVE
APPLICABILITY.
This
division
of
this
31
Act
applies
retroactively
to
January
1,
2019,
for
tax
years
32
beginning
on
or
after
that
date.
33
DIVISION
X
34
TARGETED
JOBS
WITHHOLDING
CREDIT
35
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631
Sec.
59.
Section
403.19A,
subsection
3,
paragraph
c,
1
subparagraph
(2),
Code
2019,
is
amended
to
read
as
follows:
2
(2)
The
pilot
project
city
and
the
economic
development
3
authority
shall
not
enter
into
a
withholding
agreement
after
4
June
30,
2019
2023
.
5
Sec.
60.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
6
deemed
of
immediate
importance,
takes
effect
upon
enactment.
7
DIVISION
XI
8
SCHOOL
TUITION
ORGANIZATION
TAX
CREDITS
9
Sec.
61.
Section
422.11S,
subsection
8,
paragraph
a,
10
subparagraph
(2),
Code
2019,
is
amended
to
read
as
follows:
11
(2)
“Total
approved
tax
credits”
means
for
the
tax
year
12
beginning
in
the
2006
calendar
year,
two
million
five
hundred
13
thousand
dollars,
for
the
tax
year
beginning
in
the
2007
14
calendar
year,
five
million
dollars,
for
tax
years
beginning
15
on
or
after
January
1,
2008,
but
before
January
1,
2012,
seven
16
million
five
hundred
thousand
dollars,
for
tax
years
beginning
17
on
or
after
January
1,
2012,
but
before
January
1,
2014,
eight
18
million
seven
hundred
fifty
thousand
dollars,
and
for
tax
years
19
beginning
on
or
after
January
1,
2014,
but
before
January
1,
20
2019,
twelve
million
dollars,
and
for
tax
years
beginning
on
21
or
after
January
1,
2019,
but
before
January
1,
2020,
thirteen
22
million
dollars
,
and
for
tax
years
beginning
on
or
after
23
January
1,
2020,
seventeen
million
dollars
.
24
Sec.
62.
CONTINGENT
CODE
EDITOR
DIRECTIVE.
The
Code
editor
25
is
directed
to
harmonize
the
section
of
this
division
of
this
26
Act
amending
section
422.11S
with
the
other
division
of
this
27
Act
amending
section
422.11S,
if
enacted,
by
changing
tax
year
28
to
calendar
year
where
appropriate
and
to
make
other
related
29
changes,
if
necessary,
to
effectuate
such
changes.
30
DIVISION
XII
31
DEDUCTING
RESIDUAL
FERTILIZER
32
Sec.
63.
Section
422.7,
Code
2019,
is
amended
by
adding
the
33
following
new
subsection:
34
NEW
SUBSECTION
.
60.
a.
For
purposes
of
this
subsection,
35
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“residual
fertilizer
supply”
means
an
asset
or
an
improvement
to
1
land
that
meets
all
of
the
following
requirements:
2
(1)
The
asset
or
improvement
consists
of
residual
3
fertilizer
or
excess
available
nutrients
that
are
incorporated
4
into
and
inseparable
from
land.
5
(2)
The
asset
or
improvement
is
sold
or
exchanged
in
6
conjunction
with
the
sale
or
exchange
of
land
upon
which
the
7
asset
or
improvement
is
located.
8
(3)
Following
the
sale
or
exchange,
an
expense
deduction,
9
amortization
deduction,
or
depreciation
deduction
is
allowable
10
for
federal
tax
purposes
under
the
Internal
Revenue
Code
with
11
respect
to
the
asset
or
improvement
in
the
hands
of
a
taxpayer
12
other
than
the
seller.
13
b.
For
any
sale
or
exchange
of
a
residual
fertilizer
supply
14
executed
on
or
after
July
1,
2019,
an
expense
deduction,
15
depreciation
deduction,
or
amortization
deduction
with
respect
16
to
the
residual
fertilizer
supply
shall
not
be
allowed
under
17
this
division
unless
all
of
the
following
requirements
are
18
satisfied:
19
(1)
The
expense
deduction,
depreciation
deduction,
or
20
amortization
deduction
is
allowable
to
the
taxpayer
under
the
21
Internal
Revenue
Code.
22
(2)
The
residual
fertilizer
supply
is
part
of
a
signed,
23
written
agreement
between
the
seller
and
buyer
that
identifies
24
the
residual
fertilizer
supply
and
the
consideration
paid
by
25
the
buyer
for
the
residual
fertilizer
supply.
26
c.
If
a
taxpayer
has
taken
a
deduction
in
computing
federal
27
adjusted
gross
income
that
is
disallowed
under
paragraph
“b”
,
28
the
taxpayer
shall
make
the
following
adjustments:
29
(1)
Add
back
the
total
amount
of
the
deduction
in
computing
30
net
income
for
state
tax
purposes.
31
(2)
Reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
32
basis,
if
any,
in
the
land
upon
which
the
residual
fertilizer
33
supply
is
located.
34
(3)
Any
other
adjustments
to
gains,
losses,
deductions,
or
35
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631
tax
basis
of
assets
pursuant
to
rules
adopted
by
the
director.
1
Sec.
64.
Section
422.35,
Code
2019,
is
amended
by
adding
the
2
following
new
subsection:
3
NEW
SUBSECTION
.
26.
a.
For
purposes
of
this
subsection,
4
“residual
fertilizer
supply”
means
an
asset
or
an
improvement
to
5
land
that
meets
all
of
the
following
requirements:
6
(1)
The
asset
or
improvement
consists
of
residual
7
fertilizer
or
excess
available
nutrients
that
are
incorporated
8
into
and
inseparable
from
land.
9
(2)
The
asset
or
improvement
is
sold
or
exchanged
in
10
conjunction
with
the
sale
or
exchange
of
land
upon
which
the
11
asset
or
improvement
is
located.
12
(3)
Following
the
sale
or
exchange,
an
expense
deduction,
13
amortization
deduction,
or
depreciation
deduction
is
allowable
14
for
federal
tax
purposes
under
the
Internal
Revenue
Code
with
15
respect
to
the
asset
or
improvement
in
the
hands
of
a
taxpayer
16
other
than
the
seller.
17
b.
For
any
sale
or
exchange
of
a
residual
fertilizer
supply
18
executed
on
or
after
July
1,
2019,
an
expense
deduction,
19
depreciation
deduction,
or
amortization
deduction
with
respect
20
to
the
residual
fertilizer
supply
shall
not
be
allowed
under
21
this
division
unless
all
of
the
following
requirements
are
22
satisfied:
23
(1)
The
expense
deduction,
depreciation
deduction,
or
24
amortization
deduction
is
allowable
to
the
taxpayer
under
the
25
Internal
Revenue
Code.
26
(2)
The
residual
fertilizer
supply
is
part
of
a
signed,
27
written
agreement
between
the
seller
and
buyer
that
identifies
28
the
residual
fertilizer
supply
and
the
consideration
paid
by
29
the
buyer
for
the
residual
fertilizer
supply.
30
c.
If
a
taxpayer
has
taken
a
deduction
in
computing
federal
31
taxable
income
that
is
disallowed
under
paragraph
“b”
,
the
32
taxpayer
shall
make
the
following
adjustments:
33
(1)
Add
back
the
total
amount
of
the
deduction
in
computing
34
net
income
for
state
tax
purposes.
35
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631
(2)
Reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
1
basis,
if
any,
in
the
land
upon
which
the
residual
fertilizer
2
supply
is
located.
3
(3)
Any
other
adjustments
to
gains,
losses,
deductions,
or
4
tax
basis
of
assets
pursuant
to
rules
adopted
by
the
director.
5
DIVISION
XIII
6
FRANCHISE
TAX
——
ALTERNATIVE
MINIMUM
TAX
(AMT)
REPEAL
7
Sec.
65.
Section
422.60,
subsection
2,
Code
2019,
is
amended
8
by
adding
the
following
new
paragraph:
9
NEW
PARAGRAPH
.
c.
This
subsection
is
repealed
January
1,
10
2021,
for
tax
years
beginning
on
or
after
that
date.
11
Sec.
66.
Section
422.60,
subsection
3,
Code
2019,
is
amended
12
to
read
as
follows:
13
3.
a.
(1)
There
For
tax
years
beginning
before
January
1,
14
2022,
there
is
allowed
as
a
credit
against
the
tax
determined
15
in
section
422.63
for
a
tax
year
an
amount
equal
to
the
minimum
16
tax
credit
for
that
tax
year.
17
(2)
The
minimum
tax
credit
for
a
tax
year
is
the
excess,
18
if
any,
of
the
net
minimum
tax
imposed
for
all
prior
tax
years
19
beginning
on
or
after
January
1,
1987,
but
before
January
20
1,
2021,
over
the
amount
allowable
as
a
credit
under
this
21
subsection
for
those
prior
tax
years.
22
b.
(1)
The
allowable
credit
under
paragraph
“a”
for
a
tax
23
year
beginning
before
January
1,
2021,
shall
not
exceed
the
24
excess,
if
any,
of
the
tax
determined
in
section
422.63
over
25
the
state
alternative
minimum
tax
as
determined
in
subsection
26
2
.
The
allowable
credit
under
paragraph
“a”
for
a
tax
year
27
beginning
in
the
2021
calendar
year
shall
not
exceed
the
tax
28
determined
in
section
422.63.
29
(2)
The
net
minimum
tax
for
a
tax
year
is
the
excess,
if
30
any,
of
the
tax
determined
in
subsection
2
for
the
tax
year
31
over
the
tax
determined
in
section
422.63
for
the
tax
year.
32
c.
This
subsection
is
repealed
January
1,
2022,
for
tax
33
years
beginning
on
or
after
that
date.
34
DIVISION
XIV
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631
FEDERAL
RESEARCH
CREDIT
——
INTERNAL
REVENUE
CODE
1
Sec.
67.
Section
15.335,
subsection
4,
paragraph
a,
Code
2
2019,
is
amended
to
read
as
follows:
3
a.
In
lieu
of
the
credit
amount
computed
in
subsection
2
,
an
4
eligible
business
may
elect
to
compute
the
credit
amount
for
5
qualified
research
expenses
incurred
in
this
state
in
a
manner
6
consistent
with
the
alternative
simplified
credit
described
in
7
section
41(c)(5)
41(c)(4)
of
the
Internal
Revenue
Code.
The
8
taxpayer
may
make
this
election
regardless
of
the
method
used
9
for
the
taxpayer’s
federal
income
tax.
The
election
made
under
10
this
paragraph
is
for
the
tax
year
and
the
taxpayer
may
use
11
another
or
the
same
method
for
any
subsequent
year.
12
Sec.
68.
Section
15.335,
subsection
4,
paragraph
b,
13
unnumbered
paragraph
1,
Code
2019,
is
amended
to
read
as
14
follows:
15
For
purposes
of
the
alternate
credit
computation
method
in
16
paragraph
“a”
,
the
credit
percentages
applicable
to
qualified
17
research
expenses
described
in
section
41(c)(5)(A)
41(c)(4)(A)
18
and
clause
(ii)
of
section
41(c)(5)(B)
41(c)(4)(B)
of
the
19
Internal
Revenue
Code
are
as
follows:
20
Sec.
69.
Section
422.10,
subsection
1,
paragraphs
c
and
d,
21
Code
2019,
are
amended
to
read
as
follows:
22
c.
In
lieu
of
the
credit
amount
computed
in
paragraph
“b”
,
23
subparagraph
(1),
subparagraph
division
(a),
a
taxpayer
may
24
elect
to
compute
the
credit
amount
for
qualified
research
25
expenses
incurred
in
this
state
in
a
manner
consistent
with
the
26
alternative
simplified
credit
described
in
section
41(c)(5)
27
41(c)(4)
of
the
Internal
Revenue
Code.
The
taxpayer
may
make
28
this
election
regardless
of
the
method
used
for
the
taxpayer’s
29
federal
income
tax.
The
election
made
under
this
paragraph
is
30
for
the
tax
year
and
the
taxpayer
may
use
another
or
the
same
31
method
for
any
subsequent
year.
32
d.
For
purposes
of
the
alternate
credit
computation
33
method
in
paragraph
“c”
,
the
credit
percentages
applicable
34
to
qualified
research
expenses
described
in
section
35
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631
41(c)(5)(A)
41(c)(4)(A)
and
clause
(ii)
of
section
41(c)(5)(B)
1
41(c)(4)(B)
of
the
Internal
Revenue
Code
are
four
and
2
fifty-five
hundredths
percent
and
one
and
ninety-five
3
hundredths
percent,
respectively.
4
Sec.
70.
Section
422.33,
subsection
5,
paragraphs
c
and
d,
5
Code
2019,
are
amended
to
read
as
follows:
6
c.
In
lieu
of
the
credit
amount
computed
in
paragraph
7
“a”
,
subparagraph
(1),
a
corporation
may
elect
to
compute
the
8
credit
amount
for
qualified
research
expenses
incurred
in
this
9
state
in
a
manner
consistent
with
the
alternative
simplified
10
credit
described
in
section
41(c)(5)
41(c)(4)
of
the
Internal
11
Revenue
Code.
The
taxpayer
may
make
this
election
regardless
12
of
the
method
used
for
the
taxpayer’s
federal
income
tax.
The
13
election
made
under
this
paragraph
is
for
the
tax
year
and
the
14
taxpayer
may
use
another
or
the
same
method
for
any
subsequent
15
year.
16
d.
For
purposes
of
the
alternate
credit
computation
17
method
in
paragraph
“c”
,
the
credit
percentages
applicable
to
18
qualified
research
expenses
described
in
section
41(c)(5)(A)
19
41(c)(4)(A)
and
clause
(ii)
of
section
41(c)(5)(B)
41(c)(4)(B)
20
of
the
Internal
Revenue
Code
are
four
and
fifty-five
21
hundredths
percent
and
one
and
ninety-five
hundredths
percent,
22
respectively.
23
Sec.
71.
RETROACTIVE
APPLICABILITY.
This
division
of
this
24
Act
applies
retroactively
to
January
1,
2019,
for
tax
years
25
beginning
on
or
after
that
date.
26
DIVISION
XV
27
RESEARCH
ACTIVITIES
TAX
CREDIT
28
Sec.
72.
Section
422.10,
subsection
1,
paragraph
a,
29
subparagraph
(1),
subparagraph
division
(a),
Code
2019,
is
30
amended
to
read
as
follows:
31
(a)
The
business
is
engaged
in
the
manufacturing,
life
32
sciences,
agriscience,
agricultural
animal
production,
software
33
engineering,
or
aviation
and
aerospace
industry.
34
Sec.
73.
Section
422.10,
subsection
1,
paragraph
a,
35
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631
subparagraph
(1),
subparagraph
division
(b),
unnumbered
1
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
2
Persons
that
shall
not
be
considered
to
be
engaged
in
the
3
manufacturing,
life
sciences,
agriscience,
agricultural
animal
4
production,
software
engineering,
or
aviation
and
aerospace
5
industry,
and
thus
are
not
eligible
for
the
credit,
include
but
6
are
not
limited
to
all
of
the
following:
7
Sec.
74.
Section
422.10,
subsection
3,
Code
2019,
is
amended
8
by
adding
the
following
new
paragraphs:
9
NEW
PARAGRAPH
.
c.
For
purposes
of
this
section,
10
“agricultural
animal”
means
an
animal
belonging
to
the
bovine,
11
caprine,
equine,
ovine,
or
porcine
species;
ostriches,
rheas,
12
or
emus;
farm
deer
as
defined
in
section
170.1;
or
poultry.
13
NEW
PARAGRAPH
.
d.
For
purposes
of
this
section,
14
“agricultural
animal
production”
means
activities
related
to
15
producing
or
maintaining
an
agricultural
animal.
16
Sec.
75.
Section
422.33,
subsection
5,
paragraph
e,
17
subparagraph
(1),
subparagraph
division
(a),
Code
2019,
is
18
amended
to
read
as
follows:
19
(a)
The
business
is
engaged
in
the
manufacturing,
life
20
sciences,
agriscience,
agricultural
animal
production,
software
21
engineering,
or
aviation
and
aerospace
industry.
22
Sec.
76.
Section
422.33,
subsection
5,
paragraph
e,
23
subparagraph
(1),
subparagraph
division
(b),
unnumbered
24
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
25
Persons
that
shall
not
be
considered
to
be
engaged
in
the
26
manufacturing,
life
sciences,
agriscience,
agricultural
animal
27
production,
software
engineering,
or
aviation
and
aerospace
28
industry,
and
thus
are
not
eligible
for
the
credit,
include
but
29
are
not
limited
to
all
of
the
following:
30
Sec.
77.
Section
422.33,
subsection
5,
Code
2019,
is
amended
31
by
adding
the
following
new
paragraph:
32
NEW
PARAGRAPH
.
0g.
As
used
in
this
subsection:
33
(1)
“Agricultural
animal”
means
an
animal
belonging
to
the
34
bovine,
caprine,
equine,
ovine,
or
porcine
species;
ostriches,
35
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631
rheas,
or
emus;
farm
deer
as
defined
in
section
170.1;
or
1
poultry.
2
(2)
“Agricultural
animal
production”
means
activities
3
related
to
producing
or
maintaining
an
agricultural
animal.
4
Sec.
78.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
5
deemed
of
immediate
importance,
takes
effect
upon
enactment.
6
Sec.
79.
RETROACTIVE
APPLICABILITY.
This
division
of
this
7
Act
applies
retroactively
to
January
1,
2017,
for
tax
years
8
beginning
on
or
after
that
date.
9
DIVISION
XVI
10
NEW
JOBS
CREDIT
——
FRANCHISE
TAX
11
Sec.
80.
Section
422.60,
Code
2019,
is
amended
by
adding
the
12
following
new
subsection:
13
NEW
SUBSECTION
.
14.
The
taxes
imposed
under
this
division
14
shall
be
reduced
by
a
new
jobs
tax
credit.
An
industry
which
15
has
entered
into
an
agreement
under
chapter
260E
and
which
has
16
increased
its
base
employment
level
by
at
least
ten
percent
17
within
the
time
set
in
the
agreement
or,
in
the
case
of
an
18
industry
without
a
base
employment
level,
adds
new
jobs
within
19
the
time
set
in
the
agreement
is
entitled
to
this
new
jobs
20
tax
credit
for
the
tax
year
selected
by
the
industry.
In
21
determining
if
the
industry
has
increased
its
base
employment
22
level
by
ten
percent
or
added
new
jobs,
only
those
new
jobs
23
directly
resulting
from
the
project
covered
by
the
agreement
24
and
those
directly
related
to
those
new
jobs
shall
be
counted.
25
The
amount
of
this
credit
is
equal
to
the
product
of
six
26
percent
of
the
taxable
wages
upon
which
an
employer
is
required
27
to
contribute
to
the
state
unemployment
compensation
fund,
as
28
defined
in
section
96.19,
subsection
37,
times
the
number
of
29
new
jobs
existing
in
the
tax
year
that
directly
result
from
30
the
project
covered
by
the
agreement
or
new
jobs
that
directly
31
result
from
those
new
jobs.
The
tax
year
chosen
by
the
32
industry
shall
either
begin
or
end
during
the
period
beginning
33
with
the
date
of
the
agreement
and
ending
with
the
date
by
34
which
the
project
is
to
be
completed
under
the
agreement.
Any
35
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credit
in
excess
of
the
tax
liability
for
the
tax
year
may
be
1
credited
to
the
tax
liability
for
the
following
ten
tax
years
2
or
until
depleted
in
less
than
the
ten
years.
For
purposes
3
of
this
subsection,
“agreement”
,
“industry”
,
“new
job”
,
and
4
“project”
mean
the
same
as
defined
in
section
260E.2
and
“base
5
employment
level”
means
the
number
of
full-time
jobs
an
industry
6
employs
at
the
site
which
is
covered
by
an
agreement
under
7
chapter
260E
on
the
date
of
that
agreement.
8
DIVISION
XVII
9
UTILITY
REPLACEMENT
TASK
FORCE
10
Sec.
81.
Section
437A.15,
subsection
7,
paragraph
b,
Code
11
2019,
is
amended
to
read
as
follows:
12
b.
The
task
force
shall
study
the
effects
of
the
replacement
13
taxes
under
this
chapter
and
chapter
437B
on
local
taxing
14
authorities,
local
taxing
districts,
consumers,
and
taxpayers
15
through
January
1,
2019
2029
.
If
the
task
force
recommends
16
modifications
to
the
replacement
tax
that
will
further
the
17
purposes
of
tax
neutrality
for
local
taxing
authorities,
local
18
taxing
districts,
taxpayers,
and
consumers,
consistent
with
the
19
stated
purposes
of
this
chapter
,
the
department
of
management
20
shall
transmit
those
recommendations
to
the
general
assembly.
21
DIVISION
XVIII
22
MONEYS
AND
CREDITS
TAX
ON
STATE
CREDIT
UNIONS
23
Sec.
82.
Section
533.329,
subsection
2,
paragraph
a,
Code
24
2019,
is
amended
to
read
as
follows:
25
a.
The
moneys
and
credits
tax
on
state
credit
unions
is
26
imposed
at
a
rate
of
one-half
cent
on
each
dollar
of
the
legal
27
and
special
reserves
that
are
required
to
be
maintained
by
the
28
state
credit
union
under
section
533.303
,
and
shall
be
levied
29
by
the
board
of
supervisors
and
placed
upon
the
tax
list
and
30
collected
by
the
county
treasurer
.
However,
an
exemption
shall
31
be
given
to
each
state
credit
union
in
the
amount
of
forty
32
thousand
dollars.
33
DIVISION
XIX
34
SALES
AND
USE
TAX
EXEMPTIONS
RELATED
TO
MANUFACTURERS
35
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631
Sec.
83.
Section
423.3,
subsection
47,
paragraph
d,
1
subparagraph
(4),
subparagraph
division
(c),
unnumbered
2
paragraph
1,
Code
2019,
is
amended
to
read
as
follows:
3
“Manufacturer”
does
not
include
persons
who
are
not
commonly
4
understood
as
manufacturers,
including
but
not
limited
to
5
persons
primarily
engaged
in
any
of
the
following
activities:
6
DIVISION
XX
7
SALES
AND
USE
TAX
——
PARKING
FACILITIES
8
Sec.
84.
Section
423.2,
subsection
6,
paragraph
ak,
Code
9
2019,
is
amended
to
read
as
follows:
10
ak.
Parking
Privately
owned,
for-profit
parking
facilities.
11
DIVISION
XXI
12
SALES
AND
USE
TAX
EXEMPTIONS
——
MEDICAID
13
Sec.
85.
Section
423.3,
Code
2019,
is
amended
by
adding
the
14
following
new
subsection:
15
NEW
SUBSECTION
.
107.
The
sales
price
from
sales
of
all
16
tangible
personal
property,
specified
digital
products,
or
17
services
paid
for
or
reimbursed
by
Medicaid,
as
defined
in
18
section
249A.2,
subsection
7.
19
DIVISION
XXII
20
BROADCASTERS
——
APPORTIONMENT
OF
GROSS
RECEIPTS
21
Sec.
86.
2015
Iowa
Acts,
chapter
86,
section
3,
is
amended
22
to
read
as
follows:
23
SEC.
3.
RETROACTIVE
APPLICABILITY.
This
Act
applies
24
retroactively
to
January
1,
2015
2013
,
for
tax
years
beginning
25
on
or
after
that
date.
26
EXPLANATION
27
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
28
the
explanation’s
substance
by
the
members
of
the
general
assembly.
29
This
bill
relates
to
the
administration
of
the
tax
and
30
related
laws
by
the
department
of
revenue,
including
the
31
administration
and
modification
of
certain
taxes,
tax
credits,
32
and
refunds.
33
DIVISION
I
——
INCOME
AND
FRANCHISE
TAX.
The
amendments
to
34
Code
sections
422.4(16)
and
422.9
modify
Internal
Revenue
Code
35
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631
references
relating
to
the
qualified
business
income
deduction.
1
The
amendments
to
Code
sections
422.4(16)
and
422.9
apply
2
retroactively
for
tax
years
beginning
on
or
after
January
1,
3
2019.
4
The
amendments
to
Code
section
422.11S
specify
that
school
5
tuition
organization
tax
credits
shall
be
authorized
by
the
6
department
of
revenue
on
a
calendar
year
basis
rather
than
7
a
tax
year
basis.
The
amendments
to
Code
section
422.11S
8
also
specify
that
a
school
tuition
organization
shall
be
9
controlled
by
a
board
of
directors
consisting
of
at
least
seven
10
members.
Under
current
law,
the
board
of
directors
shall
be
11
seven
members.
The
bill
provides
that
it
is
the
intent
of
the
12
general
assembly
that
the
amendments
to
Code
section
422.11S
13
are
conforming
amendments
consistent
with
current
law,
and
that
14
the
amendments
do
not
change
the
application
of
current
law.
15
The
amendment
to
Code
section
422.12C
specifies
that
a
16
nonresident
or
part-year
resident
shall
determine
their
early
17
childhood
development
tax
credit
in
the
ratio
of
the
taxpayer’s
18
Iowa
source
net
income
to
their
all
source
net
income.
The
19
amendment
to
Code
section
422.12C
takes
effect
upon
enactment
20
and
applies
retroactively
for
tax
years
beginning
on
or
21
after
January
1,
2019.
The
bill
specifies
that
for
tax
years
22
beginning
prior
to
January
1,
2019,
refunds
of
the
early
23
childhood
development
tax
credit
requested
on
or
after
July
1,
24
2019,
shall
not
exceed
the
amount
allowed
under
Code
section
25
422.12C(4),
as
amended
by
the
bill.
26
The
amendment
to
Code
section
422.60
aligns
the
definition
27
of
“Internal
Revenue
Code”
for
franchise
alternative
minimum
28
tax
purposes
with
the
definition
of
“Internal
Revenue
Code”
29
for
corporate
alternative
minimum
tax
purposes.
The
amendment
30
to
Code
section
422.60
applies
retroactively
for
tax
years
31
beginning
on
or
after
January
1,
2019.
32
The
bill
provides
for
a
deferral
of
a
gain
or
loss
resulting
33
from
exchanging
of
property
(1031
exchange)
that
meet
certain
34
conditions.
The
federal
Tax
Cuts
and
Jobs
Act
of
2017
repealed
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1031
exchanges
with
respect
to
exchanges
of
personal
property.
1
The
Iowa
tax
bill
enacted
last
year
(2018
Iowa
Acts,
chapter
2
1161)
decouples,
for
Iowa
individual
tax
purposes,
from
the
3
federal
repeal
of
1031
exchanges
relating
to
personal
property,
4
and
permits
individuals
to
defer
gain
or
loss
on
qualifying
5
personal
property
for
tax
year
2019
to
the
extent
such
deferral
6
would
have
been
permitted
under
federal
law
prior
to
its
7
amendment
by
the
federal
Tax
Cuts
and
Jobs
Act
of
2017.
The
8
bill
permits
a
corporation
or
financial
institution,
for
Iowa
9
corporate
income
tax
or
franchise
income
tax
purposes,
the
same
10
deferral
of
gain
or
loss
as
individuals
on
qualifying
personal
11
property
for
tax
year
2019
to
the
extent
such
deferral
would
12
have
been
permitted
under
federal
law
prior
to
its
amendment
13
by
the
federal
Tax
Cuts
and
Jobs
Act
of
2017.
The
1031
14
exchange
provision
takes
effect
upon
enactment,
and
applies
15
retroactively
for
tax
years
beginning
January
1,
2019,
but
16
before
January
1,
2020.
17
DIVISION
II
——
ADMINISTRATIVE
PROVISIONS.
The
amendments
18
to
Code
sections
422.20
and
422.72
permit
the
department
of
19
revenue,
by
rule,
to
disclose
state
tax
information
to
a
person
20
a
taxpayer
has
identified
to
receive
such
information
in
the
21
manner
prescribed
by
the
department
of
revenue.
22
DIVISION
III
——
SALES
AND
USE
TAX.
The
amendment
to
Code
23
section
423.2(1)
provides
that
if
a
service
or
warranty
24
contract
does
not
specify
a
fee
amount
for
nontaxable
services
25
or
taxable
personal
property,
the
sales
tax
shall
be
imposed
26
upon
an
amount
equal
to
the
sales
price
of
the
contract.
27
Currently,
the
sales
tax
is
imposed
upon
an
amount
equal
to
28
one-half
of
the
sales
price
of
such
a
contract.
29
The
amendment
to
Code
section
432.2(6)
specifies
that
30
the
sales
price
from
the
furnishing
of
carpentry
repair
and
31
installation
services
are
subject
to
the
sales
tax.
Currently,
32
carpentry
services
are
subject
to
sales
tax.
33
The
bill
enacts
new
Code
section
423.3(16A),
exempting
from
34
the
state
sales
and
use
tax
the
purchase
price
of
a
grain
bin,
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including
material
or
replacement
parts
used
to
construct
or
1
repair
a
grain
bin.
“Grain
bin”
is
defined
to
mean
property
2
that
is
vented
and
covered
with
corrugated
metal
or
similar
3
material,
and
that
is
primarily
used
to
hold
loose
grain
for
4
drying
or
storage.
This
provision
takes
effect
upon
enactment
5
and
applies
retroactively
to
January
1,
2004,
and
applies
to
6
tax
years
beginning
on
or
after
that
date.
The
bill
also
7
provides
for
refunds
of
taxes,
interest,
or
penalties
that
8
arise
from
claims
resulting
from
the
enactment
of
Code
section
9
423.3(16A)
for
sales
occurring
between
January
1,
2004,
and
the
10
effective
date
of
the
enactment
of
Code
section
423.3(16A).
11
The
bill
limits
the
refunds
to
$25,000
in
the
aggregate.
12
The
amendment
to
Code
section
423.3(47)
changes
the
13
exclusions
from
the
sales
tax
exemptions
in
that
subsection
by
14
aligning
the
exclusions
with
the
changes
made
to
the
exemptions
15
enacted
in
2016
Iowa
Acts,
chapter
1007.
This
provision
takes
16
effect
upon
enactment
and
applies
retroactively
to
tax
years
17
beginning
January
1,
2016,
for
tax
years
beginning
on
or
after
18
that
date.
19
The
amendment
to
Code
section
423.3(104)
exempts
from
the
20
sales
tax
the
sales
of
optional
service
or
warranty
contracts
21
for
computer
software
maintenance
or
support
services
furnished
22
to
a
commercial
enterprise
used
exclusively
by
the
commercial
23
enterprise.
“Commercial
enterprise”
is
defined
in
Code
section
24
423.3(104).
25
Currently,
a
retailer
making
Iowa
sales,
as
defined
in
Code
26
section
423.14A(1)(a),
shall
collect
and
remit
sales,
use,
and
27
local
option
taxes,
if
the
retailer
has
gross
revenue
from
28
Iowa
sales
equal
to
or
exceeding
$100,000
for
an
immediately
29
preceding
calendar
year
or
a
current
calendar
year,
or
has
200
30
or
more
separate
transactions
for
an
immediately
preceding
31
calendar
year
or
a
current
calendar
year.
The
bill
amends
32
Code
section
423.14A(3)(b)
by
striking
the
requirement
that
33
retailers
making
Iowa
sales
collect
such
taxes
if
the
retailer
34
has
200
or
more
separate
transactions
for
an
immediately
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preceding
calendar
year
or
a
current
calendar
year.
1
The
bill
amends
Code
section
423.14A(3)(d)
by
striking
2
the
requirement
that
a
marketplace
facilitator,
as
defined
3
in
Code
section
423.14A(1)(b),
making
Iowa
sales,
as
defined
4
in
Code
section
423.14A(1)(a),
collect
sales,
use,
and
local
5
option
taxes
if
the
marketplace
facilitator
has
200
or
more
6
separate
transactions
for
an
immediately
preceding
calendar
7
year
or
a
current
calendar
year.
The
bill
does
not
strike
the
8
requirement
that
a
marketplace
facilitator
collect
such
taxes
9
if
the
marketplace
facilitator
makes
or
facilitates
Iowa
sales
10
on
its
own
behalf
or
for
one
or
more
marketplace
sellers
equal
11
to
or
exceeding
$100,000.
12
The
bill
amends
Code
section
423.14A(3)(e)
by
striking
13
the
requirement
that
a
referrer,
as
defined
in
Code
section
14
423.14A(3)(e)(3),
making
Iowa
sales,
as
defined
in
Code
section
15
423.14A(1)(a),
collect
sales,
use,
and
local
option
taxes
if
16
the
referrer
has
200
or
more
separate
transactions
for
an
17
immediately
preceding
calendar
year
or
a
current
calendar
18
year.
The
bill
does
not
strike
the
requirement
that
a
referrer
19
collect
such
taxes
if
the
referrer
has
Iowa
sales
equal
to
or
20
exceeding
$100,000.
21
Currently,
a
referrer
is
required
to
provide
the
department
22
of
revenue,
on
a
monthly
basis,
a
list
of
marketplace
sellers
23
who
collect
and
remit
Iowa
sales
and
use
tax
on
the
platform
24
of
the
referrer.
Otherwise,
the
referrer
is
required
to
25
collect
and
remit
Iowa
sales
and
use
tax.
The
amendment
to
26
Code
section
423A.14A(3)(e)(1)(c)
provides
that
a
referrer
may
27
provide
the
department
of
revenue
such
a
report
on
an
annual
28
basis,
and
avoid
collecting
the
sales
and
use
tax
if
other
29
conditions
in
Code
section
423.14(3)(e)(1)
are
met.
30
The
bill
enacts
new
Code
section
423.14A(3)(e)(5)
specifying
31
that
the
paragraph
relating
to
“referrers”
is
subject
to
32
implementation
by
the
department
of
revenue
by
rule,
and
shall
33
not
require
a
referrer
to
collect
tax
or
comply
with
the
notice
34
and
reporting
requirements
unless
such
administrative
rules
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take
effect.
1
The
bill
amends
Code
section
423.48(2)(c)
by
striking
the
2
paragraph
specifying
that
registering
under
the
streamlined
3
sales
and
use
tax
agreement
in
another
member
state
shall
be
4
considered
to
be
registered
in
this
state
for
purposes
of
the
5
streamlined
sales
and
use
tax
agreement.
6
The
bill
establishes
a
taxation
and
exemption
computers
7
task
force
to
be
initiated,
coordinated,
and
staffed
by
8
the
department
of
revenue.
The
task
force
shall
review
the
9
definition
of
“computer”
as
used
throughout
the
portions
of
10
the
Iowa
Code
and
the
Iowa
Administrative
Code
administered
11
by
the
department
of
revenue
including
the
exemption
for
12
computers
provided
in
Code
section
423.3(47)(a)(4).
If
the
13
task
force
recommends
modifications
to
the
current
definition
14
of
“computer”
including
the
exemption
for
computers
provided
in
15
Code
section
423.3(47)(a)(4),
the
department
of
revenue
shall
16
provide
any
recommendations
to
the
general
assembly
by
January
17
1,
2020.
18
DIVISION
IV
——
AUTOMOBILE
RENTAL
EXCISE
TAX.
The
amendment
19
to
Code
section
423.14A
provides
that
a
person
who
is
not
20
required
to
collect
and
remit
automobile
rental
excise
tax
21
shall
not
be
considered
a
“marketplace
facilitator”
with
22
respect
to
the
sale
of
certain
transportation
services.
23
The
amendment
to
Code
section
423C.2
substitutes
a
person
24
required
to
collect
sales
or
use
tax
under
Code
chapter
423
25
for
“rental
facilitator”
and
“rental
platform”
and
strikes
the
26
definitions
of
“rental
facilitator”
and
“rental
platform”
from
27
Code
section
423C.2.
28
The
amendment
to
Code
section
423C.2(11)
modifies
the
29
definition
of
“rental
price”
to
mean
the
same
as
“sales
price”
30
defined
in
Code
section
423.1,
which
includes
facilitation
31
fees,
reservation
fees,
service
fees,
nonrefundable
deposits,
32
and
any
other
direct
or
indirect
charge
made
or
consideration
33
provided
in
connection
with
the
renting
or
facilitation
of
34
renting
automobiles.
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The
amendment
to
Code
section
423C.3
strikes
the
definitions
1
of
“discount
rental
charge”
and
“travel
package”.
2
The
amendment
to
Code
section
423C.3
specifies
that
the
3
automobile
rental
excise
tax
shall
be
imposed
upon
the
rental
4
price
of
an
automobile
if
the
rental
is
subject
to
the
state
5
sales
or
use
tax.
6
The
bill
strikes
numerous
provisions
in
Code
section
423C.3
7
relating
to
the
collection
of
the
automobile
rental
excise
tax
8
by
a
“rental
facilitator”
and
“rental
platform”
due
to
these
9
definitions
being
stricken
by
another
part
of
this
division
of
10
the
bill.
11
The
amendment
to
Code
section
423C.3
requires
that
any
12
person
required
to
collect
state
sales
and
use
tax
on
the
13
rental
transaction
under
Code
chapter
423
shall
collect
the
14
automobile
rental
excise
tax
as
applicable.
The
amendment
to
15
Code
section
423C.3
provides
that
a
person
is
not
required
16
to
collect
and
remit
the
automobile
rental
excise
tax
if
the
17
person
meets
certain
circumstances.
For
any
rental
transaction
18
for
which
the
person
is
not
required
to
collect
and
remit
the
19
automobile
rental
excise
tax,
the
amendment
to
Code
section
20
423C.3
requires
an
automobile
provider
to
be
solely
liable
21
for
any
amount
of
uncollected
or
unremitted
automobile
rental
22
excise
tax
and
sales
and
use
tax
under
Code
chapter
423.
23
DIVISION
V
——
TELEPHONE
COMPANY
PROPERTY.
Division
V
of
24
the
bill
authorizes
the
Iowa
utilities
board
to
classify
a
25
long
distance
telephone
company
as
a
competitive
long
distance
26
telephone
company
if
certain
revenue
source
criteria
are
27
met.
In
the
event
of
such
a
classification,
the
board
is
28
required
to
promptly
notify
the
director
of
revenue.
Upon
29
such
notification
by
the
board,
the
director
of
revenue
is
30
required
to
assess
the
property
of
such
competitive
long
31
distance
telephone
company,
which
property
is
first
assessed
32
for
taxation
in
this
state
on
or
after
January
1,
1996,
in
33
the
same
manner
as
all
other
property
assessed
as
commercial
34
property
by
the
local
assessor.
The
provisions
established
in
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631
the
bill
are
the
same
as
provisions
repealed
on
July
1,
2018,
1
by
2018
Iowa
Acts,
chapter
1160.
2
The
section
of
Division
V
of
the
bill
enacting
Code
section
3
476.1D,
subsection
10,
takes
effect
upon
enactment
and
applies
4
retroactively
to
July
1,
2018,
for
assessment
years
beginning
5
on
or
after
that
date.
6
Division
V
also
strikes
Code
section
476.1D,
subsection
10,
7
as
enacted
in
the
bill,
effective
July
1,
2021.
The
future
8
strike
of
Code
section
476.1D,
subsection
10,
applies
to
9
assessment
years
beginning
on
or
after
January
1,
2022.
10
DIVISION
VI
——
CHILDHOOD
AND
DEPENDENT
CARE
CREDIT
AND
11
EARLY
CHILDHOOD
DEVELOPMENT
CREDIT.
The
amendment
to
Code
12
section
422.12C(4)
increases
the
Iowa
net
income
threshold
13
levels
for
purposes
of
calculating
the
Iowa
child
and
dependent
14
child
care
tax
credit
and
the
early
childhood
development
tax
15
credit
available
against
the
individual
income
tax.
The
Iowa
16
child
and
dependent
care
tax
credit
is
a
refundable
credit
17
calculated
as
a
percentage
of
the
nonrefundable
federal
child
18
and
dependent
care
tax
credit,
depending
on
the
Iowa
net
income
19
of
the
taxpayer.
The
early
childhood
development
tax
credit
20
is
a
refundable
credit
equaling
25
percent
of
the
first
$1,000
21
which
the
taxpayer
has
paid
to
others
for
each
dependent
ages
22
three
through
five
for
early
childhood
development
expenses.
23
IOWA
CHILD
AND
DEPENDENT
CHILD
CARE
TAX
CREDIT.
Currently,
24
there
are
seven
graduated
Iowa
net
income
thresholds
used
to
25
calculate
the
credit.
The
bill
increases
these
graduated
26
thresholds,
but
does
not
change
the
percentage
of
the
27
nonrefundable
federal
child
and
dependent
care
tax
credit
28
used
to
calculate
the
Iowa
child
and
dependent
child
care
tax
29
credit.
30
Currently,
the
credit
percentages
in
these
seven
Iowa
31
net
income
thresholds
range
from
a
high
of
75
percent
of
32
the
federal
credit
for
taxpayers
with
net
income
of
less
33
than
$10,000,
to
a
low
of
30
percent
of
the
federal
credit
34
for
taxpayers
with
net
income
of
$40,000
or
more
but
less
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than
$45,000.
Under
the
bill,
the
credit
percentages
in
the
1
thresholds
range
from
a
high
of
75
percent
of
the
federal
2
credit
for
taxpayers
with
a
net
income
of
less
than
$12,750,
3
to
a
low
of
30
percent
of
the
federal
credit
for
taxpayers
with
4
net
income
of
$50,980
or
more
but
less
than
$57,360.
5
The
bill
also
adjusts
the
future
amount
of
each
of
the
Iowa
6
net
income
amounts
in
the
seven
graduated
Iowa
net
income
7
thresholds
by
indexing
the
thresholds
to
inflation.
8
EARLY
CHILDHOOD
DEVELOPMENT
TAX
CREDIT.
The
bill
increases
9
the
income
threshold
determining
the
eligibility
of
a
taxpayer
10
for
the
early
childhood
development
tax
credit.
The
bill
11
increases
the
eligibility
threshold
from
a
taxpayer
earning
12
$45,000
per
year
to
$57,360
per
year.
By
increasing
the
13
eligibility
threshold,
taxpayers
earning
less
than
$57,360
are
14
now
eligible
to
take
the
early
childhood
development
tax
credit
15
equaling
25
percent
of
the
first
$1,000
which
the
taxpayer
has
16
paid
to
others
for
early
childhood
development
expenses
for
17
each
dependent
ages
three
through
five.
The
bill
also
adjusts
18
the
future
amount
of
the
net
income
threshold
by
indexing
the
19
threshold
to
inflation.
20
EFFECTIVE
DATE
AND
APPLICABILITY.
The
division
takes
effect
21
upon
enactment
and
applies
retroactively
to
tax
years
beginning
22
on
or
after
January
1,
2019.
23
DIVISION
VII
——
APPORTIONMENT
OF
CERTAIN
BUSINESS
INCOME
24
OF
AN
AIRLINE.
The
amendment
to
Code
section
422.33(2)(a)(2)
25
relates
to
the
apportionment
of
income
of
an
airline
and
of
26
a
qualified
air
freight
forwarder
for
purposes
of
the
Iowa
27
corporate
income
tax.
28
A
corporation
doing
business
both
within
and
without
Iowa
is
29
required
to
apportion
its
business
income
among
Iowa
and
the
30
other
states
in
which
it
does
business.
The
amount
of
business
31
income
apportioned
to
Iowa
is
generally
in
the
same
percentage
32
as
the
business’s
gross
sales
made
within
Iowa
if
the
business
33
involves
the
manufacture
or
sale
of
goods
and
products,
or
in
34
the
same
percentage
as
the
business’s
gross
receipts
earned
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within
Iowa
if
the
business
involves
something
other
than
the
1
manufacture
or
sale
of
goods
and
products.
However,
airlines
2
and
other
specified
industries
have
special
rules
provided
3
by
administrative
rule
for
apportioning
the
income
of
those
4
industries.
5
Under
current
law
pursuant
to
701
Iowa
administrative
code,
6
rule
54.7(2),
an
airline
deriving
income
from
transportation
7
operations
is
required
to
apportion
its
business
income
to
8
Iowa
in
the
same
proportion
that
its
mileage
traveled
in
Iowa
9
bears
to
its
total
mileage
traveled
everywhere.
The
bill
10
specifies
that
an
airline
shall
apportion
this
business
income
11
in
the
same
manner
described
above
as
required
under
701
Iowa
12
administrative
code,
rule
54.7(2).
13
The
bill
also
provides
rules
for
apportioning
income
derived
14
by
a
qualified
air
freight
forwarder
from
transportation
15
operations
through
an
affiliated
airline.
The
bill
defines
16
“qualified
air
freight
forwarder”
to
be
a
taxpayer
that
is
17
primarily
engaged
in
the
facilitation
of
the
transportation
of
18
property
by
air,
and
that
does
not
itself
operate
aircraft
but
19
that
is
in
the
same
affiliated
group
as
an
airline.
20
The
bill
states
that
the
qualified
air
freight
forwarder
21
income
derived
from
transportation
operations
shall
be
22
apportioned
to
Iowa
either
under
the
current
rules
of
the
23
director
of
revenue
(current
statutory
rules),
or
in
the
24
same
proportion
that
the
miles
of
the
qualified
air
freight
25
forwarder’s
affiliated
airline
traveled
in
this
state
bears
to
26
the
total
miles
of
the
affiliated
airline
traveled
everywhere
27
(affiliated
airline
mileage
rules),
based
on
increasing
28
percentages
as
enumerated
in
the
bill
over
a
number
of
tax
29
years.
30
The
division
applies
to
tax
years
beginning
on
or
after
31
January
1,
2020.
32
DIVISION
VIII
——
BURIAL
TRUSTS.
The
bill
enacts
new
Code
33
section
422.7(6)
by
exempting
from
the
individual
income
tax
34
interest
and
earnings
received
from
a
burial
trust
fund.
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DIVISION
IX
——
ADOPTION
TAX
CREDIT.
The
amendment
to
Code
1
section
422.12A
relates
to
claiming
the
adoption
tax
credit
for
2
qualified
adoption
expenses
paid
or
incurred
by
an
individual
3
taxpayer
during
a
tax
year.
4
Currently,
in
order
to
claim
the
adoption
tax
credit
the
5
taxpayer
must
pay
or
incur
“qualified
adoption
expenses”
during
6
the
tax
year,
which
are
unreimbursed,
and
connected
with
the
7
adoption.
The
bill
strikes
the
requirement
that
the
“qualified
8
adoption
expenses”
be
paid
or
incurred
by
the
taxpayer
during
9
the
tax
year.
10
The
bill
specifies
that
if
a
qualified
adoption
expense
is
11
incurred
prior
to
or
during
the
tax
year
in
which
the
adoption
12
becomes
final,
the
qualified
adoption
expense
shall
be
allowed
13
during
the
tax
year
in
which
the
adoption
becomes
final.
14
For
qualified
adoption
expenses
incurred
after
the
tax
year
15
in
which
the
adoption
becomes
final,
the
qualified
adoption
16
expense
shall
be
allowed
during
the
tax
year
such
adoption
17
expense
was
paid
or
incurred.
18
The
division
applies
retroactively
to
tax
years
beginning
on
19
or
after
January
1,
2019.
20
DIVISION
X
——
TARGETED
JOBS
WITHHOLDING
CREDIT.
The
21
amendment
to
Code
section
403.19A
extends
by
four
years
the
22
deadline
for
entering
into
withholding
agreements
under
the
23
targeted
jobs
withholding
credit
pilot
project
from
June
30,
24
2019,
to
June
30,
2023.
This
amendment
takes
effect
upon
25
enactment.
26
DIVISION
XI
——
SCHOOL
TUITION
ORGANIZATION
TAX
CREDITS.
The
27
amendment
to
Code
section
422.11S
increases
the
total
amount
28
of
school
tuition
organization
tax
credits
that
may
be
issued
29
per
tax
year
to
$17
million
from
$13
million
for
tax
years
30
beginning
on
or
after
January
1,
2020.
31
The
Code
editor
is
directed
to
harmonize
the
amendment
to
32
Code
section
422.11S
in
this
division
with
the
amendments
to
33
Code
section
422.11S
in
another
division
of
the
bill.
34
DIVISION
XII
——
DEDUCTING
RESIDUAL
FERTILIZER.
The
bill
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enacts
new
Code
section
422.7(60),
which
relates
to
deducting
1
residual
fertilizer
supply
in
the
soil
for
purposes
of
2
individual
and
corporate
income
taxes.
3
The
bill
defines
“residual
fertilizer
supply”
to
mean
an
4
asset
or
an
improvement
to
land
that
meets
all
of
the
following
5
requirements:
the
asset
or
improvement
consists
of
residual
6
fertilizer
or
excess
available
nutrients
that
are
in
the
soil;
7
the
land
upon
which
the
asset
or
improvement
is
located
is
8
sold
or
exchanged;
and
following
the
sale
or
exchange
of
the
9
land
containing
the
residual
fertilizer
supply,
an
expense
10
deduction,
amortization
deduction,
or
depreciation
deduction
is
11
allowable
for
federal
tax
purposes
with
respect
to
the
residual
12
fertilizer
in
the
hands
of
a
taxpayer
other
than
the
seller
of
13
the
land.
14
The
bill
provides
that
for
any
sale
or
exchange
of
a
land
15
containing
residual
fertilizer
supply
executed
on
or
after
16
July
1,
2019,
an
expense
deduction,
depreciation
deduction,
or
17
amortization
deduction
with
respect
to
the
residual
fertilizer
18
supply
shall
not
be
allowed
for
individual
or
corporate
income
19
tax
purposes
unless
all
of
the
following
requirements
are
20
satisfied:
the
expense
deduction,
depreciation
deduction,
or
21
amortization
deduction
is
allowable
to
the
taxpayer
under
the
22
Internal
Revenue
Code;
and
the
residual
fertilizer
supply
is
23
part
of
a
written
agreement
between
the
seller
and
buyer
that
24
identifies
the
residual
fertilizer
supply
and
the
consideration
25
paid
for
the
residual
fertilizer
supply.
26
If
a
taxpayer
has
taken
a
deduction
relating
to
residual
27
fertilizer
supply
in
computing
federal
adjusted
gross
income
28
that
is
disallowed
under
the
bill,
the
taxpayer
shall
make
29
the
following
adjustments:
add
back
the
total
amount
of
the
30
deduction
in
computing
net
income
for
state
tax
purposes;
31
reallocate
the
amount
of
the
deduction
to
the
taxpayer’s
basis,
32
if
any,
in
the
land
upon
which
the
residual
fertilizer
supply
33
is
located;
and
make
any
other
adjustments
to
gains,
losses,
34
deductions,
or
tax
basis
of
assets
pursuant
to
rules
adopted
by
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the
director
of
revenue.
1
DIVISION
XIII
——
FRANCHISE
TAX
——
ALTERNATIVE
MINIMUM
TAX
2
(AMT)
REPEAL.
Current
law
imposes
an
AMT
on
a
financial
3
institution
to
the
extent
the
AMT
exceeds
the
financial
4
institution’s
regular
tax
liability.
The
AMT
is
generally
5
calculated
by
adding
certain
“preference”
items
(deductions,
6
exemptions,
and
other
adjustments)
back
to
taxable
income,
7
applying
an
exemption
amount,
and
then
multiplying
the
8
resulting
income
amount
by
an
AMT
rate.
The
amendments
to
Code
9
section
422.60
repeal
the
AMT
for
the
franchise
tax
beginning
10
in
tax
year
2021.
11
Current
law
also
provides
an
alternative
minimum
tax
credit,
12
which
allows
AMT
paid
by
a
financial
institution
in
prior
tax
13
years
to
be
claimed
against
regular
tax
liability
in
future
tax
14
years
if
the
financial
institution
is
not
subject
to
the
AMT
15
in
that
year.
With
the
repeal
of
the
franchise
AMT
in
2021,
16
the
bill
allows
a
taxpayer
to
claim
any
remaining
alternative
17
minimum
tax
credit
against
the
financial
institution’s
regular
18
tax
liability
for
the
2021
tax
year,
and
the
bill
then
repeals
19
the
alternative
minimum
tax
credit
beginning
in
tax
year
2022.
20
DIVISION
XIV
——
FEDERAL
RESEARCH
CREDIT
——
INTERNAL
REVENUE
21
CODE.
The
Consolidated
Appropriations
Act
of
2018
(Pub.
L.
22
No.
115-141),
which
Iowa
is
conformed
to
for
tax
year
2019
23
and
beyond,
struck
and
renumbered
a
provision
of
the
federal
24
research
credit,
which
resulted
in
a
renumbering
of
the
25
simplified
credit
in
the
Internal
Revenue
Code.
The
amendments
26
in
the
division
change
the
Internal
Revenue
references
in
the
27
Iowa
Code
to
reflect
the
changes
to
the
references
in
the
28
Internal
Revenue
Code.
29
The
division
applies
retroactively
to
January
1,
2019,
and
30
applies
to
tax
years
beginning
on
or
after
that
date.
31
DIVISION
XV
——
RESEARCH
ACTIVITIES
TAX
CREDIT.
The
32
amendments
to
Code
section
422.10(1)(a)
specify
that
the
33
research
and
activities
tax
credit
is
available
against
34
the
individual
income
tax
if
an
individual
is
engaged
in
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agriscience
or
agricultural
animal
production,
and
if
1
certain
conditions
are
met.
The
amendments
to
Code
section
2
422.33(5)(e)(1)
specify
that
a
corporation
engaged
in
3
agriscience
or
agricultural
animal
production
shall
be
eligible
4
for
the
research
activities
tax
credit
if
certain
conditions
5
are
met.
6
The
bill
defines
“agricultural
animal
production”
to
mean
7
activities
related
to
producing
or
maintaining
an
agricultural
8
animal.
9
The
division
takes
effect
upon
enactment
and
applies
10
retroactively
to
tax
years
beginning
on
or
after
January
1,
11
2017.
12
DIVISION
XVI
——
NEW
JOBS
CREDIT
——
FRANCHISE
TAX.
The
13
amendment
to
Code
section
422.60
makes
the
new
jobs
tax
credit
14
under
Code
chapter
260E
available
against
franchise
taxes
15
imposed
on
financial
institutions.
16
DIVISION
XVII
——
UTILITY
REPLACEMENT
TASK
FORCE.
The
17
amendment
to
Code
section
437A.15
extends
the
utility
18
replacement
tax
task
force
from
January
1,
2019,
to
January
19
1,
2029.
The
task
force
is
charged
with
studying
the
effects
20
of
the
replacement
taxes
under
Code
chapter
437A
(taxes
on
21
electricity
and
natural
gas
providers)
and
Code
chapter
437B
22
(taxes
on
rate-regulated
water
utilities)
on
local
taxing
23
authorities,
local
taxing
districts,
consumers,
and
taxpayers.
24
DIVISION
XVIII
——
MONEYS
AND
CREDITS
TAX
ON
STATE
CREDIT
25
UNIONS.
The
amendment
to
Code
section
533.329
strikes
a
26
provision
requiring
the
board
of
supervisors
to
impose
the
27
moneys
and
credits
tax
on
state
credit
unions
and
the
county
28
treasurer
to
collect
such
tax,
and
aligns
the
imposition
and
29
the
collection
of
the
tax
with
Code
section
533.329(2)(b)
and
30
Code
section
533.329(3).
31
DIVISION
XIX
——
SALES
AND
USE
TAX
EXEMPTIONS
RELATED
32
TO
MANUFACTURERS.
The
amendment
to
Code
section
33
423.3(47)(d)(4)(c)
modifies
the
definition
of
“manufacturer”
34
relating
to
the
sales
and
use
tax
exemption
for
machinery,
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equipment,
and
other
items
used
directly
and
primarily
in
1
processing
by
a
manufacturer.
The
bill
expands
the
definition
2
of
“manufacturer”
by
adding
the
word
“primarily”
to
the
3
exclusions
of
the
definition
of
“manufacturer”,
thereby
4
allowing
persons
who
do
not
primarily
engage
in
certain
5
activities
to
qualify
as
a
“manufacturer”.
6
DIVISION
XX
——
SALES
AND
USE
TAX
——
PARKING
FACILITIES.
7
The
amendment
to
Code
section
423.2(6)(ak)
specifies
that
the
8
services
provided
by
a
privately
owned,
for-profit
parking
9
facility
are
subject
to
the
sales
and
use
tax.
Currently,
the
10
services
provided
by
any
parking
facility
are
subject
to
the
11
sales
and
use
tax.
12
DIVISION
XXI
——
SALES
AND
USE
TAX
EXEMPTIONS
——
MEDICAID.
13
The
bill
enacts
new
Code
section
423.3(107),
which
exempts
from
14
the
state
sales
and
use
tax
the
sales
of
all
tangible
personal
15
property,
specified
digital
products,
or
services
paid
for
or
16
reimbursed
by
Medicaid,
as
defined
in
Code
section
249A.2(7).
17
DIVISION
XXII
——
BROADCASTERS
——
APPORTIONMENT
OF
GROSS
18
RECEIPTS.
The
amendment
to
2015
Iowa
Acts,
chapter
86,
section
19
3,
extends
the
retroactive
applicability
of
the
apportionment
20
of
the
gross
receipts
of
a
broadcaster
enacted
during
the
2015
21
legislative
session
in
Senate
File
479,
from
January
1,
2015,
22
to
January
1,
2013.
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